Lessons from Shanghai: China’s booming demand for lead-acid batteries good news for the tin industry

Last month Stellar Resources presented at the 2015 International Tin Forum in Shanghai, one of the biggest industry events of the year.

During the Forum there were many interesting and uplifting presentations from tin professionals and experts, including Tianneng Power, one of the two leading Chinese motive battery producers.

In a detailed presentation, Tianneng Power forecast that China’s lead-acid battery industry – which uses tin to reduce corrosion and increase battery life – will rapidly grow over the next few years. The lead-acid battery is the oldest and one of the most trustworthy types of rechargeable battery, and its large power-to-weight ratio and low cost makes it an attractive prospect for use in electric vehicles – an industry which is booming in the Far East.

Tianneng revealed that battery production in China has risen by 55% in the last three years, attributing this surge to the country’s demand for clean power and travel. Ownership of e-bikes for example, which use lead-acid batteries, has now reached a huge 190 million in China; with 30 million being sold last year alone. The ownership of four-wheeled electric vehicles, also powered by lead-acid batteries, has increased as well: doubling to 400,000 in the last two years.

It’s not just clean vehicles that the Chinese are seeking either – but clean energy as well.

In its presentation Tianneng explained how lead-acid industrial batteries are used to store solar and wind-generated power. As the demand for renewable energy is increasing in China, so is the use and production of tin and the lead-acid industrial battery.

Concluding its presentation, Tianneng predicted that the use of tin in the lead-acid battery industry could increase from almost 12,000 tonnes in 2014 to 17,600 in 2018. This is exciting and positive news for Australian tin explorers and developers such as Stellar Resources, with a premium location giving easy-access to the Chinese market.

Source: Tianneng Power presentation, 2015 ITRI International Tin Forum
Source: Tianneng Power presentation, 2015 ITRI International Tin Forum

Stellar project lights up tin market

The May edition of Paydirt reports that despite the challenges tin producers and explorers are facing in the market, many remain bullish the sector will bounce back ‘with history suggesting a tin price recovery is on the cards’.

One explorer and developer ‘prepared for the fight’ is Stellar Resources, who article author, Mark Andrews, describes as a ‘potential rising star in the game’.

Earlier this year Stellar conducted a metallurgical optimisation study at its Heemskirk Tin project in Tasmania, which revealed better tin recoveries (up 7.4% to 79.5%) from the Severn deposit were possible, while average recoveries across all deposits improved by 4.5% to 72.8%. An increase in recoveries has also boosted production potential to 4,520t, resulting in a PFS valuation for the Heemskirk Tin Project of $160 million.

Commenting on Stellar’s credentials as Australia’s best emerging tin producer, Managing Director Peter Blight said, “There is growing interest within the tin industry itself as to where the next sustainable production is going to come from. What the industry is looking for is investible projects and I think we stack up pretty well on the list.”

The article also reports on the big focus for Stellar this year; starting a DFS at Heemskirk, with Andrews suggesting “further metallurgical improvements and resulting cost optimisations will no doubt help Stellar’s pursuit for cash”, with the company looking to secure $10 million.

Tin Price Jumps most in Three Years

Yesterday (Monday 20 April 2015) the price of tin surged by 6.7%, the most it had in three years, as signs of declining supplies spurred buying.

In an article for Bloomberg, Agnieszka de Sousa and Debarati Roy report that stockpiles tracked by the London Metal Exchange fell to the lowest since October, and Indonesia’s largest private smelter, Refined Bangka Tin, will halt production this week. The journalists argue that these factors helped the price of tin climb 6.7% to settle at $15,525 a metric ton, the biggest jump since January 2012.

The rising price of tin will be beneficial to developers and explorers such as Stellar Resources, especially as buyers may decide to stay away from unstable markets such as Indonesia and instead look for long-term stable supplies of tin in Australia.

To read more about this story featured on Bloomberg, click on the link below:

http://www.bloomberg.com/news/articles/2015-04-21/tin-jumps-the-most-in-two-years-as-indonesia-plans-output-cuts

Tin Annual Conference highlights future demand and current issues

Tin_exploration_miningNo need for a crystal ball as leading professionals discussed the future of tin at the second annual tin conference in Melbourne on Wednesday 5th November. International Tin Research Institute (ITRI), MetalsX, Stellar Resources amongst others presented findings on tin’s performance this year and future outlook.

Peter Kettle was the keynote speaker from ITRI and has been involved in tin research for over 30 years. Kettle’s view on the long term is that the story remains unchanged, stating that there is a high probability of supply shortages developing in the next five years. But that in the short term the supply surges from Myanmar and Indonesia, coupled with the weakness in key demand sectors, are contributors to setbacks in the tin price. Having said that Kettle went on to say that US$19,000/tonne (the current price level) represented the low point for tin prices as marginal producers are unprofitable at this level.

Kettle also spoke about the positive changes for tin use and production in the future. Where tinplate and solder were the past hero applications, using tin for chemicals, energy purposes and lead and steel alloys is set to increase significantly in the next ten years. He also predicted that changes in the locations of major mines will see a shift from Indonesia, Peru and China to sites in Africa, Australia and Russia.

Interestingly, Metals X’ Peter Cook stated that the Renison Bell tin mine had made great progress in improving its production performance. However, in valuing all of assets in Metals X “tin” was a freebie.

Other presentations by Kasbah and Venture Minerals were bullish about tin’s future and that the supply issues will become critical. They also agreed that patience was required as the tin price needed to be at least $25,000 per tonne in order to attract funding for projects.

The presentation by Stellar Resources was led by the managing director Peter Blight who has been with the company for seven years, after previously working for UBS, UC Rusal and Rio Tinto.

Blight discussed Stellar’s promising Heemskirk and St Dizier resources. Heemskirk is the highest grade undeveloped ASX listed tin resource and is one of only seven known tin projects that BGR – German Federal institute of Geosciences and Natural Resources (mandated to report on future supply of critical metals to government and industry) – claimed has a good chance to go to operation by 2020.

Heemskirk, combined with St Dizier, has 85 kilotonnes of tin. Following very positive prefeasibility results in July 2013, Stellar plans to target its first production in 2017.

In terms of future exploration these sites in Tasmania have outstanding potential, especially with their unexplored halo of silver-lead veins.

ITRI’s seminar is also presented in Brisbane, Sydney and Perth.

To view Peter Kettle’s presentation click here.

Lower sales predicted for fourth quarter: Indonesian smelters polled

Bloomberg recently carried out a poll among Indonesian smelters assessing future exports. The results indicate an expected median export of 16,000 tonnes for the fourth quarter of 2014. Lower prices and stricter controls are cited as drivers behind the prediction.

However, ITRI predicts Q4 exports between 20,000 and 25,000 tonnes, though does concede that “controls on illegal mining do appear to be getting tighter and the new export regulation will greatly reduce exports of tin in non-ingot form”.

ITRI’s predicted export rate would still place annual exports at around 80,000 tonnes, the lowest since 2007.

Over the past few months, Indonesian police have been cracking down on illegal tin mining – particularly in protected areas – and these tightened controls combined with dropping prices and new export regulations are likely to have contributed to lower sales.

The new regulations will come into effect from November 1 and are likely to impact the price of tin.

Source: ITRI

Tin: A lesser-known fire fighter

Australia is well-known for its scorching hot summers. While many of us trudge through winter awaiting the warming feeling of the sun’s rays, this weather can also mark a period of potential high risk. Fires are undoubtedly dangerous and ruthless disasters that occur during those hot summer months. That’s why researchers have spent countless hours determining the best and most cost-effective fire retardants available.

Although a wide range of chemicals have been used as fire retardants over the years, many have been found containing inherent toxic elements, and therefore have negative impacts on the environment. Researchers and the general public have raised concern about these harmful chemicals, and have sought the market for other alternatives.

During the mid-1980s, The International Tin Research Institute (ITRI) had begun development of novel tin-based additives that could be used as a safer, more effective fire retardant. This development has proven a great success, and nowadays, these compounds are being marketed world-wide. As we can see, the application of tin in everyday instances has gone on to benefit the environment and the public globally.

Yet despite clear technical benefits, including non-toxicity and excellent smoke suppression, markets for tin compounds have been somewhat limited due to their relatively high price compared to many other flame retardants. This has seen recent research focussing on tin additives being used as synergists with other flame retardants and on developing more cost-effective systems.

Tin has certainly proven to be an element offering several advantages over many conventional flame retardants. The development and application of tin continues to be analysed in terms of its potential benefits to our society as a whole and consequently, the use of tin is expected to grow in the immediate future. Australians are armed with a firefighter that can help them out if needed.

Source: ITRI

Tin Deficit in 2014 Seen Lower as Myanmar Ore Supply Gains: ITRI

Bloomberg news has reported a global shortfall of ore supplies, while ore supplies from Myanmar to Chinese smelters have increased.

The deficit has been reported to drop to 7,000mt this year from the estimate of 10,800mt last year. However Myanmar ore output has grown from 20,000mt in 2013 to 25,000mt in 2014, reports ITRI China chief representative, Cui Lin.

The market is expected to remain in deficit in 2014 with Indonesia’s new export policy due to take effect in November. This policy may reduce production during the rest of the year. The low tin price may further curb high-cost production in Indonesia.

This year, China exported an average of 9,000mt of tin in metal, between January and August. During an interview conference in Suzhou, eastern China last week, Cui cited industrial data outlining expectations that exports would fall during the rest of the year, as Chinese prices moved above London Metal Exchange rates.

Indonesia is the largest shipper of tin, with China its biggest consumer.

Indonesian smelters setting their own tin price

Bloomberg reported that trade on the Indonesia Commodity and Derivatives Exchange (ICDX) was weak due to the country’s tin producers holding out for sales above the benchmark spot rate in London to try to counter a decline in prices.

Citing almost a USD$400 premium, smelter members on the ICDX were offering prices between USD$500 – USD$600 a metric ton above the contract on the London Metal Exchange.

The opinion from Peter Kettle of International Tin Research Institute (ITRI) was that Indonesian sellers were not prepared to follow the London Metal Exchange price down.

David Lennox, a resource analyst at Fat Prophets commented that the Indonesian members could be testing the market and if the reaction was positive then maybe there was some underlying strength in the market.

The Bloomberg article also said smelters don’t want to sell cheap because ore prices are very high and prefer to build up stockpiles, on expectations that the price will rise to a decent level, probably at USD$23,000 a ton.

The decision was defended by Jabin Sufianto, chairman of Association of Indonesian Tin Exporters, stating that the weak trade on the ICDX was simply because of the price.

Trade on the ICDX totalled 4,855 tons in August, 3,810 tons in July and 4,660 tons in June, exchange data show. On September 11 cargoes of the metal were sold above the London price and prior to that the last trade was on August 27, when the PB300 contract, the most active, was at $22,080 a ton. That was $398 above the LME spot price that day, Bloomberg calculations show. Inventories tracked by the LME climbed 4.4 per cent to 12,295 tons in August. The reserves dropped 1,085 tons to 10,210 tons yesterday, the lowest since May, according to LME data compiled by Bloomberg.

Implemented by the Indonesian government, the minimum price for tin contracts is decided by an exchange committee in the ICDX daily. Sales made through an auction system can’t be made below this daily rate, which is officially known as the Suggested Opening Bid.

According to BNP Paribas SA, it is reported that the global demand for tin will outstrip supplies for a fifth year in 2014. The market will have a global deficit of 13,000 tons this year and 10,000 tons in 2015.

Source Bloomberg: Tin Smelters in Indonesia Holding Out for Premiums to LME