The US has not considered tin as a strategic metal for sometime and has
(or has almost) completed a gradual sale of the US national stockpile.
Tin has an equivalent resource level/scarcity to other non-ferrous
metals relative to their consumption rate.

Regarding price, Joe selected comparison from a 2 year price point and
from April 2004 the price is lower not higher. It is possible to make
any generalisations depending on the base price from which you
start.Talking of extremes; starting from 2001, and the all time low
price for tin, will show a 2x price rise. Starting from 1980, the all
time high price, would show a current price at only a quarter of that
high. See graph below which is adjusted for inflation to 2002 prices. 

I don't have a graph which runs up to date but you will see that the
period from 2000 was part of a low price cycle which will inevitably
adjust back to a more stable long term average.... $8000pt is something
approaching an average price. 

There are many causes of price fluctuation - only part of that results
from demand changes and supply 'inelasticity' as quoted by Joe. The 3
main factors affecting tin (in common with most other metals including
lead) are;
1.The recent weakness of the US$ generates an 'apparent' price rise
which is due only to relative currency fluctuation.
2. An increased and significant investment interest in all commodities
by insurance and pension funds (and as David says tin suffers from such
external trading factors to a greater extent than other metals due to
the lower volumes involved)
3. Demand from China for all resources

Joe suggests that the sole cause of the current 'high' price is the
demand created by lead-free solder. That possibility is of far less
significance than the 3 major factors mentioned above. Demand is
currently not key to the metal price. Stocks of tin in warehouse are
currently higher than they have been for a considerable time and yet the
price is not falling as would be expected in a typical supply-demand
model. There is no explanation for that type of market behaviour.

Joe suggests that the prices of metals are not linked. "Were it
otherwise, there would be need to only track the price of one  metal and
adjust all other metals to match its percentage of gain or
retreat.".....This technique of general metal indexing is in fact used
by market analysts as one way of predicting price fluctuations in the
metals markets. Copper is generally the metal taken as the 'guide price'
although this may depend on the situation. 

You may of course make your own interpretations but these facts are
generally accepted by most expert market analysts.

Kay



GRAPH: 'Real' price to 2002 - expressed in US dollar 2002 equivalent.

 <<Microsoft Graph Chart>> 


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