At the beginning of the year, analysts and investors predicted a deficit in the global supply of tin. It was thought that this deficit would lead to boosted prices of the metal, which is heavily relied on by the global electronics industry.
Last week, Reuters reported a rise in tin stocks on the London Metals Exchange (LME), flagging unexpected Chinese exports as the likely force behind the rise.
Peter Kettle, manager of markets for ITRI is surprised that supply appeared to be greater than anticipated, saying, “The consensus view was that there is a deficit this year, but no one can actually see it in real life.”
Instead of a scarcity of tin, stocks in warehouses monitored by the LME MSNSTX-TOTAL have surged by nearly 50 per cent since February 27, confounding investors and analysts, reported Eric Onstad from Reuters.
“Analysts polled by Reuters in April expected the cash LME tin price to average $23,360 a tonne this year, compared with the current price of $22,200” Mr Onstad said.
Tin analysts are finding that more material has been available on global markets, partly due to unexpected exports from China. Whilst no hard data has been released from China, Kettle estimated that China exported around 5,000 tonnes of tin in the first five months of the year, an increase of about 50 per cent from the same period last year.
However, some analysts still expect that shortages in tin will develop. Analyst at Standard Bank, Leon Westgate said, “tin is only a couple of bullish stories away from being re-ignited, with the ingredients in place for a strong rally when it is.”