BO'C
Throughout this period the demand for tin has remained very weak and there has been a continuing excess of production over demand, encouraged by the existence of the Tin Council's
floor price. Since the collapse of the market in February,
the Penang price has remained on or near the floor.
M$ 29.15 per kilo (approximately £7,400 per tonne). A small up-surge at the end of August reflected to some extent the effects of the second export control period, which by its
nature tends to influence the market towards the end of the
period. However, by the middle of September, the price had
fallen again to the floor and has since remained there. The
support of the Buffer Stock Manager on the London Metal Exchange has been less vigorous and there the price is currently some £200 per tonne below the floor at Penang. The main reason for this
partial support of the LME is a lack of buffer stock resources.
In contrast, all other non-ferrous metals, which have no commodity agreements, have remained depressed due to the recession, and production has been cut back.
Recently the activities of the Buffer Stock Manager have been
closely questioned by certain members of the Council including the
UK following the forward buying and selling of tin on the LME
against warrants, with finance provided by brokers. These actions
are a potential further financial commitment on member states and
the situation has caused concern; it is not certain that these
transactions are wholly within the terms of the Agreement.
Department of Trade
22 October 1982
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