Document Type: 
Document Number (FOIA) /ESDN (CREST): 
Release Decision: 
Original Classification: 
Document Page Count: 
Document Creation Date: 
December 9, 2016
Document Release Date: 
January 10, 2000
Sequence Number: 
Case Number: 
Publication Date: 
January 1, 1964
Content Type: 
PDF icon CIA-RDP79T01003A001900020001-8.pdf670.45 KB
246 Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 SECRET FOREIGN DISSEM Current Support Brief DECLINE IN CHINESE COMMUNIST EXPORTS OF TIN HELPS FORCE WORLD PRICE TO RECORD LEVEL CIA/ RR CB 64-7 January 1964 CENTRAL INTELLIGENCE AGENCY Office of Research and Reports NO FOREIGN DISSEM SECRET GROUP 1 Excluded from automatic downgrading and declassification Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 WARNING This material contains information affecting the National Defense of the United States within the meaning of the espionage laws, Title 18, USC, Secs. 793 and 794, the trans- mission or revelation of which in any manner to an unauthorized person is prohibited by law. Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 S-E-C-R-E-T HELPS FORCE WORLD PRI A drop in Chinese Communist ecoeed production caused the price ofp tion in the Free World continued tin on the London (world) market to move above 1, 000 pounds sterling per long ton in December 1963, the highest level declined rough1ye50 percent Chi- nese exports (and presumably production) d during the 19,60-63 period; as a result, the a USSR net exporter of Communist i t Bloc as a whole have shifted from the position of exports will in- crease a net importer. There is no evidence that Chinese crease significantly for at least the next year or tw 1o, nor anwhiliseany rapid increase of output in the Free World anticipated. from the US tin stockpile may keep the price from rising significantly above the level of 1, 000 pounds sterling. 1. Shift in the Tin Position of the Bloc During 1963, for the first time in 8 years, the Sino-Soviet Bloc hinese became a net importer of tin from the Free as ind cat Substantiainl 1, exports of tin to the West were more than Tin Metal with the Free World Sino-Soviet Bloc: Net Trade o6-T Thousand Metric Tons Communist China European Satellites Net 2 1 Neg1. 1.6 1956 0.4 . 12.0 -0.1 13.7 4 1957 1. 4 18 Negl. 22. 1958 0 .6 4 6 . 13.9 -0.1 17.4 1959 3. 8.5 -0.2 13.0 1960 2 0 -2.4 1961 6.5 . -o 8 -4.2 o.6 1962 5.6 . l .0 -3 -2.1 1963 / 6.0 _5. . Annual tonnage computed from data for January through July. S E C-R-E-T Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 XPORTS DECLINE IN CHINESE COMMCE I TO ER CORD LEVEL Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 S-E-C-R-E-T tin-processing facilities . _ ere e level of output. Perhaps the f ina il L e ac ities are bei g operated at less than capacity as a result of technological problems in the large mines as well as the closure since 1960 of many primitive labor-intensive "native" mines. Taken together, these two factors would have reduced substant1 ally the output of tin in co" t ' e by increased purchases of tin by the USSR and the European Satellites. Chinese sales to the West have ranged from 5, 600 to 6, 500 tons* each year since 1960, whereas sales by the USSR, which reached a 18, 400 tons in 1958, had declined to negligible amounts by 196 peak of 1961 the USSR has purchased increasin Y Since with such imports approximating 5 g quantities of tin from the West, , 00s in 13. Imorts by European Satellites from the Free World tamoun e9d to aout 3, 000 the in 1963. ons The rise and fall in Bloc exports in recent years is traceable largely to shifts in the Chinese Communist position. China's tin industry, as a result of extensive Soviet assistance in engineering and equipment, was modernized and expanded during the 1950's. By 1959, Chinese out- put of tin metal probably was approximately 30, 000 tons annually, 70 to 80 percent of which was produced in Soviet-built facilities at Ko-chiu, in southwestern China. China's consumption of tin, however, is small, ranging from possibly 2, 000 to 3, 000 tons annually. Thus production is primarily for export. As shown in Table 2, peak of 27, 000 tons in 1959 Chinese exports rose to a but since have declined to an estimated total of 10, 000 to 15, 000 tons in 1963. Shipments to the USSR have risen and fallen in similar fashion and provided the basis for large Soviet exports to the Free World in 1957-59. Shipments to the European Satellites have been maintained, and sales to the Free World have increased consider- ably, amounting to roughly US $14 million to US $16 million of foreign exchange earnings annually since 1961. - ~ilu ueclin hinese Communist During 196 - 2 6 3 exports is unknown. n rates. Again, it is conceivable that the Chinese, for some unknown reason, are holding exports to the Free Worl at a constant level and are buildin up d unlikely, however g P stocks of tin. The latter seems in view of the country's need for foreign exchange. Unless otherwise indicated, tonnages throughout this publication are given in metric ton,,;. Approved For Release 2000/08/29 : CIk F DP~9A'1A001900020001-8 ?~,,, 25X1 D 25X1 D 25X1 D Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 Approved For Release 2000/08/29 : CIEA-RDP79T01003A001900020001-8 S-E-C-R- Chinese Communist Exports of Tin Metals 1956-63 l t T USSR European Satellites Free World Year o a 1956 16.5 15.7 0.4 0.4 8 1957 24.3 22.0 0.5 1. 0 4 1958 24.7 19.3 1.4 . 6 1959 27.1 20.8 2.7 3. 4 1960 25.1 17.7 2.7 .7 6 1961 20.6 11.2 2.9 .5 1962 15.5 a/ 8.8 1.1 a/ 5.6 1963 10 to 15 b/ 4 C/ N.A. 6.0 d/ a. Data on shipments to Hungary and East Germany are incomplete. b. Estimated. c. Annual tonnage computed from data for January through November. d. Annual tonnage computed from data for January through July. 2. Impact on the Free World Market The decline in exports of tin by the Bloc has had a significant impact on the Free World market in recent years. As shown in Table 3, con- sumption of tin in the Free World has exceeded production each year since 1957, even though output has increased since the late 1950's. Since 1959, production has been steady at about 145, 000 tons annually, whereas con- sumption has averaged 162, 000 tons per year. Malaysia, the world's largest producer of tin (40 percent of the Free World's output of concen- trates and 57 percent of the tin metal in 1962), has increased its produc- tion significantly since 1958-59 as have several lesser countries, including Thailand and Nigeria. Such increases have been offset to a considerable extent, however, by declining levels of output in a number of other impor- tant tin-producing nations. Output of concentrates in the nationalized industry of Indonesia, the third largest producer in the Free World, has fallen off roughly 20 percent, and output in the strife-torn Republic of the Congo (Leopoldville) about 22 percent. Bolivian production, the second largest in the West in 1962, was approximately 8 percent below that of 1959, largely as a result of increased union interference in the operation of the government-owned mines. S-E-C-R-E-T Approved For Release 2000/08/29 : CIA-RDP79T01003A001900020001-8 Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 S-E-C-R-E-T Impact of the Decline in Bloc Exports of Tin 1-956-63 Thousand Metric Tons Avera e g Year Free World Production Free World Consumption Bal Net Imports London Price (Pounds ance from_thc_hloc Per-Long Ton) 1956 1 169.7 152.4 17.3 1.6 787.7 957 8 160.9 145.3 15.2 13.7 754.8 195 122.9 138.2 -15.3 22.4 734.9 1959 6 115.8 150.4 -34.6 17.4 785.4 19 0 147.8 164.6 -16.8 13.0 796 6 1961 96 141.2 161.5 -20.3 6.1 . 888.6 1 2 6 145.8 161.6 -15.8 0.6 896.5 19 3 a/ 145.0 161.0 -16.0 -2.1 1,029.0 b/ a. Annual tonnage computed from data for January through July. b. Average price on the London market as of 18 December 1963. During 1958-60, shortfalls in production of tin in the Free World were matched to a considerable extent, as shown in Table 3, by Bloc sales in the West. In this 3-year period the shortfall totaled 67, 000 tons com- pared with imports from the Bloc of 53, 000 tons. However, withdrawals from stocks began in 1959 and have continued- Consumer stocks as well as stocks of most tin brokers have been reduced as have been the non- commercial stocks of the Italian and Canadian governments, The US Government since 1962 has been releasing quantities of tin from the approximately 164, 000 tons of tin designated as being in excess of the requirements of the national stockpile, 50, 000 tons of which have been authorized by Congress for disposal over an extended period. In addi- tion, the International Tin Council (ITC), formed in 1956 by key produc- ing and consuming nations of the Free World (except the US) to cushion wide fluctuations in price, had exhausted its buffer stock of tin by the end of 1963. The continued drain on stocks since 1959 presumably is responsible for the increase in the average world price from about 800 pounds sterling in 1960 to more than 1, 000 pounds sterling in December 1963. Approved For Release 2000/08/29 : CIA- 9TG1O0B'AOD1900020001-8 Approved For Release 2000/08/29: CIA-RpP79TO1003AO01900020001-8 S-E-C-R-E- 3. Prospects Prospects for a rapid increase in world production of tin during the next 2 to 3 years are dim. Production of tin in the USSR is expected to increase to possibly 26, 000 tons by the mid-1960's (compared with an estimated total of 23, 500 tons in 1963), but available information indi- cates that output will continue to lag behind consumption by several thousand tons annually. Chinese exports of tin probably will not in- crease significantly in the near future, barring some dramatic change in the situation such as Western assistance in expanding China's pro- duction of tin. For the large and efficient Western companies, the instituting of adequate long-term investment safeguards on the part of the producing countries reportedly is indispensable for any new expansion programs that involve large capital expenditures over an extended period. For other producers, such as the nationalized industry of Indonesia, a lack of adequate technical skills as well as a shortage of funds prob- ably will insure against any significant increases during the next year or so. In addition, a key task confronting practically all of the tin industries of the Free World is the increasing need to develop new reserves sufficient to take care of growing long-term demand. Sufficient surplus tin is held in the stockpile of the US Government to cover the world deficit in tin for several years. In this connection, the ITC in a meeting held on 2-4 December 1963 regarding the high world price for tin reportedly concurred in US sales of up to 500 tons of tin weekly at any time that the price is between 965 and 1, 000 pounds per long ton. In addition, it was reported that the ITC would be pre- pared for the US to sell tin in "quantities sufficient to meet demand" when the price is about 1, 000 pounds sterling per long ton. Analyst: S-E-C-R-E-T Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 Approved For Release 2000/08/29 SECRE CIA- ,BDP79TO1 NO FOREIGN DISSEM SECRET Approved For Release 20(9l98L2QjR(MP RDR70$W3AO01900020001-8 Analyst: R/MM (Project 23. 5076) 25X1A Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 OFFICE OF RESEARCH AND REPORTS Series Number CIA/RR CB 64-7 Date of Document January 1964 Copy No. 25X1A 165 - 200 Recipient Rec'd in St/P/C 9 T GROUP 1 Excluded from antamatV dewngratling and declassi8 tlon Classification tl L Number of Copies 230 VIC:- Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 Approved For Release 2000/ : TA-RDP79TO1003AO01900020001-8 SUBJECT: Distribution of Current Support Brief No. # 64 7. Decline in Chinese Communist Exports of Tin Helps Force World Price to Record Level --- January 1964 (SECRET/NO FOREIGN DISSEM Copy No. Recipient 1 O/DDI, Room 7E32, Hdgtrs. 2-3 NIC 4 - 12 OCI Internal 13 - 15 ONE 16 - 21 St/CS/rut 25X1A 22 O/DDI - 23 - 31 32 NSAL 33 - 230 ORR Distribution, St/A/Document Support Section, Room GH0915, Hdgtra. OCR (Distributed by ) SECRET GROUP 1 Ii ded from automatic wngrading and I ecfauaiflcaffan Approved For Release 2000/08/29 : CIA-RDP79T01003A001900020001-8 SECRET ve r e ape 20 0 /29 : T01 003AO01 St/A/DSS 9tVfig u n0 o urren upport r e o. -7. Decline in to-Record Chinese Communist Exports of n Helps Force World Price 4- jsECR TINO FDBEIGx Copy Noe Recipient 33 AD/RR DAD/RR 34 Ch/E #163 The Office of Em ergency Planning, Dr. '-ioy St/PR John F. Allums, Room 113, Executive 36 - 40 D/A (1 each branch) Office Building, for A. E. Pierce, Room 41 - 46 D/MS (1 each branch) 317, Winder Bui lding 47. - 52 D/R (1 each branch) 53 - 60 D/M (1 each branch) 61 - 69 1)/I (1 each branch) 70 - 71 D/GG 72 - 73 D/GC 74 D/GC/X 75 - 80 RID/AN, Unit 4, Room 1B4004, Hq. 81 St/FM 82 Analyst/Branch R/MM) 83 GR/CR 84 BR/CR 85 FIB/SR/CR, Room 1G27, Hqo 86 Library/CR 87 IPI/CR 88 VMR, A-18 89 AD/OO 90 Chief, FDD 91 CD/OO 92 OCI/RP/PS, Room 7G15, Hqa 93 DDI/CGS, Room 7F35, Hqa 94 DDI/CGS/HR, Room 3F30, Hq. 95 - 97 OSI 98 OBI 99 - 100 OTR/IS/IP, Room 532, Broyhill Bld o (1 - OTR/SIC) 101 NPIC/CSD/REF, Room 1S518, 102 Commandant Nat'l. War College, Ft. Leslie McNair, Attn: Classified Records Section, Rmo 26, Nat'l. War College Bldg., Wash., 25, Do Co 103 - 113 114 - 127 128 - 137 138 - 139 140 - 143 144 - 155 156 159 160 - 161 162 - 200 201 - 230 ACSI/Army, Room 1C460, Pentagon Navy, Director, ONI, Room 5B659, Pentagon HQ. USAF, Attn: AFNIN-3D1, Room 4B137, Pentagon Ass'ta Secretary of Defense, ISA, Room 4D825, Pentagon USIA, Warren Phelps, IRR/D, Room 701, Walker Johnson Building, 1734 New York Avenue, N. W. State, INR Communications Center, Room 7818, State Dept. Bldg. DIA, DIASA-2C, Room 2D233, Pentagon Dr, Neilson Debevoise, NSC, Room 365, Executive Office Building Frank M. Charrette, Agency for International Development, Chief, Statistics and Reports Division, Room 302, State Annex No. 1 A pi 'd d P&qWARA00098/29 : CI - UN 10 A001900020001-8 Records Center Excluded from automatic FT downgrading and daclxesiflcaflon 25X1 A Approved For Release 2000/08/29: CIA-RDP79TT~OIQp~ 001-8 ORR P--J' L X( .+: `)ONES CONTROL PROCESSI'i S E 007 i . +d. d, aft 6400 roqueater witiated rer; owed ter. port # I a@ut to .A1.)/RR 11 kart 0,4 sent to D341 re port 1 j ivou to % Nst.) ioDft 04 to di +m r rnirrate dr*tt SECJtaRI4TY ou?, ,vw to he cht d ecd 25X1 C (for pow .&- ~~- -?- 0200044-,.>itzrading and drw1.asf"ifecatio .., Approved For Release 2000/08/29 ?ttA-aRlP79T01003A001900020001-8 13 February 1964 MRMORAND i FC : FRCM SUB CT . Chief, Dissemination Control Branch, re/CR Chief, Publications Staff, ORR Transmittal of Material It to requested that the attached copies of CIA/RR CB 6L-7, Dec ,ne in Chinese C .uniet Exports of Tin Helps Force World. .ret/NO * RIMIRV TS:_ e as o oars: State, INE Ct uunications Center, Rocco 7818, State Dept. Bldg For baaeiea in Bangkok, Hong Kong., Kuala Wmpur, Singapore, and Tokyo Attachments: Copies 188 - 92 of CB 64.7 cc: CGS/RB 1h?> ~~SS'=;_;na2:arr r_?~ue5tQd by it ?s memorandum has been tomp1044 pate / t/ -L Approved For Release 2 0 0 010 8/2'9: C ]A*R1 P79TO1003AO01900020001-8 S uT Approved For Release 2000/08/29 : CIA-RDP79TO1003AO01900020001-8 ?roject No. 23. 5076 Report Series CIA/RR CB 64-7 Title Decline in Chinese Communist Exports of Tin Helps Force World Price to January 1964 (SECRET NO FOREIGN DISC M 4.esponsible Analyst and Branch R/MM 25X1A RECOMMENDED DISTRIBUTION TO STATE POSTS Far East ARA Berlin, Germany a kok, Thailand Mexico Bucharest, Romania Djakarta, Indonesia Guatemala Budapest, Hungary C1A- Panama Moscow, USSR r Rangoon, Burma Brazillia, Brazil Prague, Czechoslovakia Buenos Aires, Argentina Sofia, Bulgaria Saigon, Vietnam Bogota, Colombia Warsaw, Poland Seoul, Korea Santiago, Chile a ore, British La Paz, Bolivia {Nur Taipei, Formosa Montevideo, Uruguay o vo an Caracas, Venezuela Belgrade, Yugoslavia Vientiane, Laos Bern, Switzerland Phnom Penh, Cambodia Africa Bonn, Germany Colombo, Ceylon ~OUA/DE Brussels, Belgium -Cameroun Copenhagen, Denmark Near East & South Asia Leopoldville, Congo Frankfurt, Germany Addis Ababa, Ethopia Geneva, Switzerland Ankara, Turkey Accra, Ghana Helsinki, Finland Athens, Greece Abidjan, Ivory Coast The Hague, Netherlands Cairo, Egypt Nairobi, Kenya Lisbon, Portugal Damascus, Syria Monrovia, Liberia London, England Kabul,Afghanistan Tripoli, Libya Luxembourg, Luxembourg Karachi, Pakistan Rabat, Morocco Madrid, Spain New Delhi, India Lagos, Nigeria Oslo, Norway Nicosia, Cyprus Mogadiscio, Somal Paris, France Tehran, Iran Khartoum, Sudan Rome, Italy Baghdad, Iraq Tunis, Tunisia Stockholm, Sweden Tel Aviv, Israel Pretoria, South Africa Vienna, Austria Beirut, Lebanon Algiers, Algeria Amman, Jordon Cotonou, Dahomey 'acific Jidda, Saudi Arabia Dakar, Senegal Bamako, Mali Wellington, New Zealand Ottawa, Canada Manila, Philippines Canberra, Australia Melbourne, Australia Approved For Release 2000/08/29 : SEGO 4T