Malaysia's tin market closed $100 down on Friday but remained at a wide difference to the LME as the tin price in London also declined overnight.
Spot tin on the Kuala Lumpur Tin Market (KLTM) was quoted at $6,510 a tonne, with 40 tonnes traded. On Thursday, the price stood at $6,610 a tonne, on a volume of 45 tonnes.
But tin on the LME, or London Metal Exchange, dipped $170 on Thursday to $6,330 a tonne. Accordingly, the cost of shipping a tonne of Malaysian tin to Europe rose to $374 from $305 a day ago, KLTM dealers said.
The freight cost, which includes insurance and broking fees, is known in market parlance as the KLTM's premium to the LME.
Until December, premium was around $200-$250 a tonne.
But a heavy run-up on the KLTM since has seen it going even beyond $400 a tonne, making Malaysian tin a little pricey for European interests.
"The KLTM price should have gone down further because the difference to LME is very big now," said a dealer.
Malaysian interests were the only bidders on Friday's market, attempting to buy a total of 27 tonnes against the 55 initially put out for sale.
Sellers later rolled their offers by 15 tonnes, concluding on a volume of 40. Volumes on the KLTM have declined sharply in recent months owing to a global tightness in supply of tin ore concentrates.
Dealers have said demand for tin was likely to exceed supply by 16,000 tonnes in 2004. On Thursday, LME's tin stocks stood at 14,290 tonnes, against a record high of 39,475 tonnes in August 2002.
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