Tin can prices seen rising amid tighter supply
Source: Packaging Digest
Prices of tin can used for packaging sardines and corned beef may rise slightly by mid-May due to the tightness of supply in the world market.
Henry A. Tanedo, president and chairman of the Tin Can Manufacturers Association of the Philippines, Inc. (TCMAPI), told reporters yesterday there are indications that suppliers want to hike the prices of tin plates used in making tin cans by May.
"There are indications that suppliers want to hike the prices of tin plates. By May 15, there might be significant increases," said Mr. Tanedo.
While oil price hikes have an impact on tin can production, he said the possible culprit for the rise in tin can prices this time would largely be tightness in supply in the international market.
"The issue here... is more on the scarcity of supply [as] China and Europe are actively buying," said Mr. Tanedo.
But the TCMAPI downplayed the possible hike in world prices of tin plates, saying it would not cause the prices of tin can to skyrocket. "If any, the price of tin cans would settle at slightly above the P3.30 [per piece] level registered in October 2005," Mr. Tanedo said.
Tin can prices are now lower than the P3.30 per piece registered in October last year as demand for it has been slow in recent months.
TCMAPI said all of the country's tin plates are sourced from abroad, mostly from the United States, South Korea, Japan, Australia and Taiwan.
"Global Steel [Philippines Inc., or GSPI] has yet to manufacture tin plates; that's why we have to source them abroad," Mr. Tanedo said, noting that GSPI has indicated that it will start the manufacture of tin plates within the next two months.
Mr. Tanedo said tin can makers need about 240,000 metric tons (MT) of tin plates a year. He said around 65% of the tin cans produced are food- grade, or used for packaging food items, while the rest are for general use.
As for other steel products, Philippine Iron and Steel Institute (PISI) President Wellington Tong said the prices of some steel products like steel billets and slabs went up in the international market in recent months.
"Steel billets, for one, went up by around 35% in the last two to three months, while slab prices went up by 42%," said Mr. Tong.
This, he said, is largely due to currently tight supply, as both the United States and the European Union posted a strong rebound in demand for steel billets and slabs.
"There is no shortage yet, but our inventories are already stretched," said Mr. Tong, noting that a strong demand for steel products in the first quarter of this year boosted the sales of steel manufacturers.
Despite a strong showing in the first quarter of the year, however, PISI cannot say whether this will signal a rebound of the industry, given the increasing cost of oil in the world market. Last year, PISI said total demand for steel products increased by more than 10% to 2.9 million metric tons (MMT) from the 2.6 MMT registered in 2004.
"Any movement in oil prices will definitely affect us, since we are considered as the biggest consumer of power," said Mr. Tong.
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