ITRI Conference Market Update May 2014

The International Tin Research Institute (ITRI) annual conference was held in Penang, Malaysia from 12-16 May. This year’s conference was well attended by all of the major producers, potential new entrants, smelters and traders along with some consumers.

Traders took the view that the market is balanced at present with little difficulty in sourcing metal. ITRI agreed with this view for the next few months, but felt there was an increasing likelihood that prices would break-out on the upside as the year progresses. In support of this view, ITRI cited the continuing discipline of the Indonesian Government in setting production targets in-line with their price expectations and the low level of stocks across all industry participants. As the table below indicates ITRI is forecasting a rising deficit in the tin market through 2014 which should support higher prices.

Souce: ITRI 2014
Source: ITRI 2014

Taking a five year view, ITRI sees Indonesian tin exports declining from the 85,000 tonnes expected in 2014 to below 60,000 tonnes. This view was also shared by the German Government agency responsible for monitoring strategic metal supply Bundesanstalt für Geowissenschaften und Rohstoffe (BGR). In their review of new supply, BGR indicated that Indonesia’s resources are sufficient for 10 years production at a declining rate, providing an opportunity for new entrants to fill the supply gap emerging towards the end of the decade.

The BGR presentation detailed the findings of a review of 157 tin resources many of which were visited by their research team. In October 2013, the BGR team visited Stellar’s Heemskirk project with an expert on tin geology.  The chart below summarises the findings of this study by placing those resources with the potential for mine development at current tin prices on a plot of grade versus tonnage of contained tin.

It is pleasing to see that Stellar’s Heemskirk tin project is well placed on the plot as one of the highest grade resources scheduled for underground mining.

Source: BGR 2014
Source: BGR 2014

Tin replaces lead in solar cells

Tin continues to flex its muscles as a safer alternative to lead. First there was the shift from lead-based solder to tin-based solder. Now tin has been flagged as the best substitute for lead in solar cell technology.

A new solar cell developed by two separate teams of researchers promises low-cost, enhanced efficiency and a smaller environmental footprint.

The new cell uses a perovskite structure composed of tin instead of lead as the light-absorbing material in a perovskite solar cell. A perovskite structure’s usefulness in solar cells was discovered in 2009 using lead as the primary structure, but researchers have now demonstrated successful perovskite solar cell technology using tin.

Tin is the ideal material because unlike lead, it is a low-toxicity metal and is not easily absorbed by the human body.

Tin perovskite structure offers the potential economic advantage of being cheap and easy to make. It can be simply integrated into a standard manufacturing process.

The tin solar cell currently has an efficiency of around 6 per cent. Efficiency of a solar cell is measured as a percentage of sunlight absorbed versus the amount converted into energy. Tin has lower efficiency than lead, which reaches 15 to 16 per cent. However, researchers are encouraged by the fact that in 2009, lead perovskite structures were only at 3.8 per cent and they expect that tin will eventually be able match that efficiency.

Lead researcher Mercouri G. Kanatzidis, an inorganic chemist with the Weinberg College of Arts and Sciences at Northwestern, as reported in Nature Photonics, said “There is no reason this new material can’t reach an efficiency better than 15 percent,”

“Tin and lead are in the same group in the periodic table, so we expect similar results.”

If tin perovskites mimic the pattern set by lead, researchers will have brought a non-hazardous recipe of materials to a very promising technology.

The technology will still have to be demonstrated outside the laboratory and be proven to be affordable and durable at a commercial scale.

Source: Climate Spectator

SEC guidance following US court decision on conflict free minerals

The world’s tin supply is expected to remain in deficit for the foreseeable future and some of the largest tin users in the United States may now face an ethical decision of whether or not to describe their products as ‘conflict minerals free’. This follows a court ruling in the U.S that companies are no longer required to report conflict free minerals.

The US Securities and Exchange Commission (SEC) this week released guidance on conflict minerals reporting rules, following the U.S court decision.

Many of the estimated 6,000 companies that this ruling affects are part of the technology industry that uses tin solder in its products and accounts for around 44 per cent of the world’s tin consumption.

According to an article written in the Wall Street Journal this week, the SEC’s guidance is expected to resolve some of the confusion companies face. A federal appeals court removed part of the rule, citing free speech concerns. The rule requiring companies to say whether their products contained conflict minerals from war-torn regions of the Democratic Republic of Congo (DRC) was not valid. In the court’s ruling, it wasn’t clear what companies were required to say in reports they file to the SEC.

The guidelines released by the SEC have assisted in clearing this confusion for affected companies. The guidelines state that “No company is required to describe its products as ‘DRC conflict free,’ and ‘not been found to be DRC conflict free,’ or ‘DRC conflict undeterminable’.”

The guidelines go on to state that, “If a company voluntarily elects to describe any of its products as ‘DRC conflict free’ in its Conflict Minerals Report, it would be permitted to do so provided it had obtained an independent private sector audit (ISPA) by the rule. Pending further action and ISPA will not be required unless a company voluntarily elects to describe a product as ‘DRC conflict free’ in its Conflict Minerals Report”.

Sources: Wall Street Journal, US Securities and Exchange Commission Public Statement

Indonesian tin exports decline in march

Indonesian tin shipments declined to 5,848 tonnes in March which is

2.5 per cent below shipments of 5,998 tonnes in the previous month and 35 per cent below the March 2013 level of 9,296 tonnes, according to an article by Bloomberg.

Shipments have exceeded the average monthly rate of 7,634 tonnes that was set in 2013 only once in seven months. This is since new regulations were introduced requiring all tin ingots to be traded via the Indonesian Commodity and Derivatives Exchange prior export.

Indonesia is the largest exporter of tin in the world and accounts for around a third of global primary production.

 

 

 

March - Indonesian Monthly Tin Exports

 

 

March news update

March has been a busy month in the world of tin. On the local front, Stellar Resources commenced a 17-hole diamond drilling program at its Heemskirk Tin Project in Tasmania, covering both Heemskirk and the St Dizier deposit and drilling to a total depth of 4,740 metres.

The overall objective of the program is to improve project economics following positive results from a Pre-Feasibility Study in July 2013. The program will run until October, with assay results expected in the second half of the year.

The world’s largest exporter of tin, Indonesia, has been the focus for much of the global tin news this month.

Early in March there were concerns from Indonesia that the country’s tin output could be disrupted by prolonged dry weather. The islands of Bangka and Belitung, where about 90 per cent of ore is derived have been very dry since late December. The islands’ open-pit mines that supply ore to smelters need substantial water levels for digging up and separating the raw metal from mud.

As reported by Bloomberg, the dry spell may raise fuel costs for pumping in water especially for mines that are located far from water sources.

Tin smelter, PT Refined Bangka’s Salim said in an interview with Bloomberg, “Now it’s very hot and dry, water is absorbed and evaporated faster.

“Tin smelters in Bangka and Belitung including PT Refined Bangka use ore which is dug up from open-pit mines on land as well as dredged from the seabed offshore. The islands’ weather is normally rainy from December through March,” said Salim.

PT Timah, Indonesia’s biggest producer of tin exports has not seen any major export disruption from the dry weather so far. However, according to Bloomberg, one of its vessels was en route to Singapore on March 13 when it was intercepted by the Indonesian Navy and its exports seized under suspicion the 2,888 tonnes of tin it was carrying failed to meet government trade rules.

Part of the cargo seized belonged to members of the Indonesia Commodity and Derivatives Exchange (ICDX). Law in Indonesia requires all refined tin to be traded through the ICDX before shipment.

Tin has climbed 2.3 per cent on the London Metals Exchange (LME) this year, and is currently the best performer after nickel. The price for tin looks set to rise into April as it moves towards a predicted average of US$24,000 per tonne for 2014, with the price currently at US$23,225 per ton on the LME.

 

Source: Bloomberg

Explorers are in the money

Money has begun flowing back into Australian resource exploration companies with a significant pick-up in exploration expected by the June quarter, Robin Bromby reported in The Australian this week. Bromby reports Stellar is “out to test sentiment” by offering stock to shareholders at .52c, with the hope of raising $1.2m to fund an optimisation drilling program at the high grade Heemskirk Tin Project, drilling of the satellite St Dizier tin prospect and working capital requirements. Drilling is scheduled to commence in March 2014.

Read the full article

Improving outlook for tin solder

The predicted increase in global production of electronic equipment is set to be another coup for the global tin market in 2014. According to US market research company Henderson Ventures, the annualised value of global electronic equipment production for December 2013 was US$2.13 trillion, a marked improvement over the cyclical low in April 2013 of US$1.79 trillion. This is an important development for the tin market as electronic equipment production accounts for 98% of tin solder demand which in turn represents 52% of the market for tin.

Henderson Ventures attribute the electronic equipment production improvement to increased activity in Chinese factories and increased orders for equipment in the United States. Weaker equipment sectors such as personal computers and military are declining at much lower rates than in early 2013, while tablet demand is still showing double digit growth. Communications, the largest sector, is emerging as a strong contributor to the growth.

As the chart following shows, 2014 is shaping up to be a rebound year after poor growth in electronic equipment production in 2012 followed by a reduction in 2013.

World Production of Electronic Equipment

Indonesian tin exports hit three-month low

An article by Bloomberg has reported that tin exports from Indonesia were at a three-month low during January 2014. Data compiled by Bloomberg showed that exports of ingots and solder fell 66 per cent to 4,613 tonnes, down from 13,562 tonnes in December 2013. This number is well below the market expectation of 7,000 tonnes.

One possible reason for the low export numbers is the potential impact of the monsoon season in Indonesia. Another is the particularly high December figures, suggesting that stocks were depleted to cover contract shortfalls at the end of last year and some production went into re-stocking rather than being exported.

According to Bloomberg, numbers for January were the lowest since October 2013, when export numbers improved after the Indonesian government ordered tin exporters to trade the metal on the Indonesia Commodity and Derivatives Exchange (ICDX) before being exported. From January 12, 2014, Indonesia has also banned shipments of raw ores to encourage miners to build processing plants.

The International Tin Research Institute (ITRI) has predicted the global tin deficit to rise in 2014, supported by the tin market tightening in January 2014, with the London Metal Exchange (LME) stocks declining to a new five-year low of 8,815 tonnes.

Bloomberg predicts that the reduced supplies from Indonesia may help stem a decline in the LME tin price, which at the time of writing was US$22,275 per tonne.

Source: Bloomberg, Reuters

Indonesian monthly refined tin exports January 2013 to January 2014
Indonesian monthly refined tin exports January 2013 to January 2014

 

Stellar in the Australian

The looming tin shortage is not going away according to Robin Bromby, who in today’s edition of The Australian reports on the rising interest in Stellar’s Heemskirk Tin Project following a placement of $2.6 million from private Luxembourg company Capetown S.A. last week. Read the full article here.

Stellar is pleased to welcome another major new investor and plans to use the funds to optimise our Heemskirk Tin Project as well as for general working capital purposes. Capetown S.A is based in Luxemburg and the owner of the private family owned company has a long association with the tin industry, having spent the last 40 years developing the Mettalum Group, a non-ferrous metal recycling business. Read the full announcement here.