If any metal is going to recover, tin can

Factiva: "Tin companies are starting to reach critical mass on the stock exchange, argues Robin Bromby

``WE think tin will be one of the first metals to recover once markets stabilise,'' says Sydney-based Resource Capital Research.

Great. The problem is that tiny matter -- markets stabilising. There is some pretty dreadful news about. The 15-nation Eurozone watched its economy contract 1.5 per cent in the December quarter. Last week Morgan Stanley's Asian chief, Stephen Roach, told Asian central bankers they were in trouble with China at a standstill, Japan getting ``clobbered'' (his word) and problems for Asia's exporters. As Bloomberg reported, Singapore's state-owned investment arm Temasek Holdings lost the equivalent of Sri Lanka's entire GDP in the eight months to November 30.

But Resource Capital Research does have a point. Unlike most of the other base metals, there is no growing tin surplus. Inventories held at the London Metal Exchange now sit at 8820 tonnes, against a 52-week high of 11,430 tonnes. The RCR case is that a rebound in Chinese demand, coupled with the closing of mines in Indonesia, could trigger supply shortages."