Exchange Extends Tin Trading Halt For Another Week
LONDON (AP) _ The British government pressured the financially troubled International Tin Council on Friday to end the crisis that has halted trading and threatens to collapse the metal’s oversupplied market.
But the London Metal Exchange said trading will remain suspended next week because lack of an agreement to support the artificially high price of $11,900 per metric ton could bankrupt some brokers.
The crisis emerged Oct. 24, when the 22-nation tin council scrapped price- support operations, and the metal exchange halted trading in its tin contract. An emergency meeting of the council last month failed to resolve the problem and adjourned until Nov. 12.
Britain’s pressure came in a statement by Trade Secretary Leon Brittan, who urged the council to advance its next meeting to Nov. 8 and agree on ″orderly measures for the settlement of the council’s existing obligations.″
The council later announced members would consult about rescheduling the meeting.
Lack of progress dismayed the metal exchange and the tin council’s creditors, which include 14 banks and 14 metal exchange dealers, and heightened fears about a market collapse.
Following Brittan’s statement and after talks at tin council headquarters Friday with council executives and officials from creditor banks, the exchange announced the trading suspension would remain in force next week.
Traders said if dealing resumed without a rescue operation that gave financial guarantees to bankers and brokers with tin council contracts, the price would plummet and many brokers would go bankrupt.
The metal exchange is the main world metals trading center, with contracts in copper, aluminum, lead, zinc, nickel and silver, besides tin.
Britain’s lead in seeking a solution to the crisis was welcomed by Pieter de Koning, the tin council executive responsible for carrying out support- buying operations.
″It is marvelous for bankers, brokers and for the ITC (International Tin Council),″ he said.
A council official, who spoke on condition he not be identified, said the council also had been encouraged by indications from banks that they would take no protective action pending outcome of the next council meeting.
There had been fears the banks might attempt to sell tin they have taken as collateral from the council for loans. The council’s cash fund that was once used to finance its market-support operations ran out three years ago.