The sharp rise in price, despite this serious setback in consumption, is attributable to the working of the tin restriction scheme. Since the introduction of the tin buffer pool in the middle of this year, a relatively high price range has been the express aim of official tin policy. To achieve the required rise in the price, the free market quota under the tin scheme had to be cut down to the lowest level since the end of 1933. Since the 4 middle of this year the quota has been maintained at 35 per cent. of the standard tonnages for current supplies, plus 10 per cent. for the accumulation of the buffer pool.
These figures compare with 110 per cent. for the free market in the second half of 1937. This year's low quotas have kept the world's tin supply (including the outside supply) in the first three quarters of 1938 at 114,600 Yang tons, or 700 tons below the current rate of consumption. Since the middle of this year, however, the shortfall in supply has been much greater. The 35 per cent. quota permits exports from the seven restricting countries to the extent of 19,348 long tons per quarter. to which another 7,000 tons, supplied from non-restricting countries, must be added. The total of 26,348 tons may be compared with the official consumption figure of 34.300 tons for the third quarter of 1938. In the fourth quarter of this year tinplates output, both inside and outside the United States, will show a slight recovery from its low level. This movement is likely to make further slow headway in the first three months of next year, even f trade revival in the United States fails to show any spectacular progress. Stocks of tinplates in the U.S.A. have been reduced to normal levels recently, and as the tinplates industry must now! begin to prepare for the 1939 canning season, it cannot possibly continue to operate at only one-third 6934 of its capacity.
The present 35 per cent. quota for the free market in tin will remain in operation until the end of March next. Thus the margin by which consumption exceeds supplies, which was about 7950 tons in the third quarter of 1938, and may be put at About 10,000 tons for the last quarter of this year, is likely to be at least 12,000 tons in the first three months of the New Year. So far the bulk of the shortage of supplies has been met from consumers' stocks accumulated at low prices in the closing months of 1937 and the early months of 1938. These stocks, however, are back to, or are even below, normal Thus, consumers will be compelled to re-enter the market to an increasing extent. This is particularly true of the United States, the most important tin-consuming country In recent months, US. tin deliveries have been at the lowest levels for years past and have thus remained even below the much reduced consumption. A revival of buying, which seems almost certain next year, whatever happens to international trade, would inevitably involve a recurrence of the artificial tin market conditions which existed between 1933 and 1935. At any rate, the tin market will be dependent on the release of substantial quantities of buffer pool tin in the first quarter. Now. as the pool will hardly release its tin freely at the current price, there is a strong possibility that the tin price wilt climb to £230 per ton—the upper limit fixed by the buffer pool agreement—before the end of next March.
Text read from the printed page and cleaned; old type leaves the occasional error.