International Tin Agreements

Tin has been one of the very few commodities which has been covered by an international commodity agreement. It is the only metal so covered. The reason behind tin's prediliction for an agreement has been the inconsistency of the price pattern for tin during the entire 20th century. It is not surprising in view - of the wide and wild fluctuations in its price that tin has been called the Cinderella metal. An examination, for example, of prices in 1977 alone attests to the erratic behavior of the tin markets. The high was recorded on October 27 at M$1,895 per picul and the low on January 3 at M$l,314 3/8, on the Penang market, a spread in Malaysian dollars of $581 for a picul weighing 133 1/3 pounds. The first steps in international cooperation on tin were taken after the price bonanza of the First World War. Despite a lack of increased consumption, and in spite of the fact there was no shortage of mining production during the war, prices boomed. Shipping shortages and thinning stocks brought about a situation where in the U.S., industrial stocks were only 1/6 of what they had been in 1914. The boom busted early. In 1921 the tinplate industry of the world had cut its output in half and total world consumption of tin fell by 1/3. Tin producers became so concerned that they created what was called the Bandoeng Pool. It accumulated stocks held by countries now known as Indonesia and Malaysia, amounting to 28 percent of the combined production of the two countries and about 15 percent of the total world for 1921. The pool holdings were shortly exhausted and thereafter in the years 1924 to 1928, general boom conditions existed for tin.