FINANCIAL NOTES
THE TIN POOL PLAN
INSPIRED buying of tin which has recently carried the price from L160 to £180 a ton has again been proved to have drawn its inspiration from the right source. The International Tin Committee, having slashed the quota to 45 per cent. for the third quarter, has now approved the much-discussed buffer-pool plan. Full details are not yet disclosed but appa- rently the scheme is to follow closely the draft outlined last month, operating between limits of £200 and £230 per ton. Meantime, the buffer-stock quota is to be fixed, for the third quarter, at to per cent., leaving a free quota for the market of 35 per cent. In the light of current consumption estimates, the implications for the market are definitely " bullish." Allowing 30,000 tons as a generous estimate of the annual production of non-restricted countries, total output for the third quarter will be at an annual rate of roughly 125,000 tons.
Such production includes that for the buffer stock which, on its quota allocation, will be absorbing metal at an annual rate of just over 20,000 tons. The amount of metal for the market would thus be something over zoo,000 tons per annum, which is well below even the most pessimistic estimate of consumption. Until genuine consumers, as distinct from speculators, return to the market as buyers one cannot be sure that the recent rising price trend will continue, but it seems certain that " free " stocks, i.e., those held outside the pool, will be reduced. An important section of the market is already convinced that the Committee is determined to raise the price to at least the lower pool limit of £2C0 a ton.
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