A couple of corrections for tin

Andy Home from Reuters, reported on a couple of “official corrections” which has led to key figures within the tin industry conceding that the forecast tin deficit is unlikely to appear this year.

According to Peter Kettle, market manager for industry body ITRI, the reason for the disappearance of the predicted deficit come in two parts;

  1. The demand side has experience a low-speed growth rate which shows every sign of decelerating to just two per cent this year. This is largely influenced by the electronics industry and its demand for solder.
  2. Production of tin is proving to be more resilient than most tin market analysts expected and this comes down to major suppliers, namely Indonesia and China.

Indonesia and China are the two largest suppliers of tin in the world. Like other supplies Indonesia and China are facing similar problems with the rising cost of operating diminishing tin mines. Yet, refined tin production in China rose by 17 per cent in the six months to end-July, pointing to a suspicion that tin is leaving the country in forms that the Chinese government wouldn’t want to officially record on their customs log.

Stocks of tin registered with the London Metal Exchange (LME) have been creeping steadily higher over the last couple of months. At 13,235 tonnes, they are now up by 3,575 tonnes, or 37 per cent, on the start of the year, reports Home.

“The absence of any sign of stocks stress has deflated bull spirits. LME three-month metal has done little more than tread water in a range of US$22,000 to US$23,000 per tonne since early June,” Mr Home said.

However Home concedes that despite the London Metal Exchange and global stock prices recording small tin surpluses in the past months, a tin deficit is inevitable at some point within the next few years.

Source: Reuters

Stellar on the Road

Stellar Resources continues to be represented at mining and resources conferences around Australia and the world.  In July and August, Managing Director, Peter Blight attended the 2014 Noosa Mining and Exploration conference and the Diggers & Dealers conference in Kalgoorlie.

The Noosa Mining and Exploration conference featured over 45 listed resource companies and is designed for serious investors to better understand current investment opportunities in the mining and exploration sector.

Diggers & Dealers is made up of mining and exploration companies, brokers, bankers, investors, financiers and mining service industries. It is considered one of the premier mining conferences in Australia and for the first time, Stellar was included as one of the exhibitors.

Stellar’s famous eye catching tin man stole the show again at both conferences, drawing in the punters to learn more about ‘Tin in Tassie’ and Stellar’s Heemskirk Tin Project.

Stellar’s tin man at Noosa



Tin shipments from Indonesia seen shrinking

Tin shipments from Indonesia for the month of July are set to contract the most since January, with at least 16 of 47 Indonesian smelters being forced to curb production after a police campaign against illegal mining disrupted ore supplies. Indonesia is the largest tin exporter in the world.

This latest news could continue to impact the predicted global tin shortage for 2014. A Bloomberg survey published on July 4 showed that exports from Indonesia in 2014 are set to decline to the lowest in eight years, as the Indonesian government prepares to introduce rules to ensure accurate cargo declaration by setting standards of quality, packaging, shape and size. Sales may drop 13 per cent to 80,000 tonnes this year, the survey showed.

In an interview with Bloomberg News on July 23, Agung Nugroho, corporate secretary at PT Timah, Indonesia’s biggest tin producer, expects the tin prices to rise to US$24,000 on the Indonesian Commodities and Derivatives Exchange (ICDX) by September if the government closes the loopholes for lower-grade exports.

“We’re not satisfied as the price hasn’t reached the level we wanted because of the high exports.

“Sales will probably tumble 35 per cent to 8,000 tonnes this month from 12,377 tonnes in June, as output declines about 40 per cent,” Mr Nugroho said.

This will have an impact on the global market, which is expected to have a deficit of 13,000 tonnes this year and 10,000 tonnes in 2015. These deficits are expected to push the tin price on the London Metals Exchange (LME) to US$25,000 per tonne as soon as the third quarter this year and US$27,000 by mid-2015, a spokesperson for BNP Paribas SA said earlier this year.

Tin traded at US$22,400 per tonne on the LME on July 25.

Source: Bloomberg

Hidden Chinese tin stocks, weak demand head off expected deficit

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.”

Source: Reuters



Indonesia to loosen grip on tin market

Indonesia’s tin trade regulations have been loosened according to Tin Investing News, reporter Teresa Matich.

Matich said that “Indonesia has put a tight squeeze on the tin market since it changed regulations surrounding trade of the metal in August 2013. However, the country’s government has indicated that could change soon with amendments to last fall’s export rules.”

Read the full article here.

The London tin market is quiet. Too Quiet.

The price of tin on the London Metal Exchange (LME) has had little movement since the beginning of May, only moving between US$23,000 and US$23,500 per tonne. A recent article by Reuters reporter Andy Home looks into why the London tin market has been quiet and what people are predicting moving forward.

Andy’s article draws commentary from Leon Westgate at Standard Bank London as well as Steven Briggs at BNP Paribas to gauge why the market is behaving as it is and what these two analysts are predicting for the future.

He goes on to talk about the current stock level on the LME which rose by 1,190 tonnes over the last two weeks of May, along with the current situation in China and Indonesia that may be having an impact on the LME.

To read the full article click here

Tin like a coiled spring

The latest tin market comment by Stephen Briggs from BNP Paribas has predicted that demand growth for tin will remain muted in 2014-15 at three per cent per annum.

Briggs says that constraints on existing producers and a lack of new mines will severely limit growth in tin output.

The report goes on to say that BNP Paribas still expects deficits to drive tin above US$25,000 per tonne and reiterates its long tin versus short copper recommendation.

Read the full report here – Tin like a coiled spring