Declining U.S. Demand Puts Tin at 8-Year Low

Tin fell to its lowest level in almost eight years because of declining demand from U.S. computer makers and increased production in China, the largest miner of the metal.

A slowing U.S. economy reduced demand from the country’s computer industry by about 8% in the first half of this year, according to the Commodities Research Unit, a London-based research organization. China, which produces about two-fifths of the world’s tin, increased output by 20% last year after a 17% rise in 1999, the CRU said.

“People are going to be looking for a recovery in demand or a decline in production” if tin prices are to recover, said Peter Kettle, a CRU analyst.

Tin for delivery in three months dropped $10, or 0.2%, to $4,615 a metric ton on the London Metal Exchange, its lowest since October 1993.

Computer makers use about 35% of the world’s tin for solder in circuit boards, Kettle said. Demand elsewhere in the $1.2-billion-a-year market--from makers of food cans, plastics and herbicides--has been stable in recent years, he said.

China accounted for about 100,000 tons of the 265,000 tons of tin produced last year, according to CRU.

Any increase in the price will depend on economic recovery in the U.S., which now appears to have been deferred until the end of this year or the first quarter of 2002, Kettle said.