Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Shrinking demand to eclipse supply issues in tin market

Stock Markets Jul 11, 2019 11:11
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Shrinking demand to eclipse supply issues in tin market

By Pratima Desai

LONDON (Reuters) - The tin market is under greater pressure from an economic slowdown and falling demand than supply issues, where lower production from countries such as Myanmar is likely to be offset by a new project in central Africa.

Tin prices on the London Metal Exchange at around $18,000 (£14,360) a tonne are down 15% since hitting one-year highs at $21,800 a tonne in February, when the market was fretting about record low stocks in LME approved warehouses.

(For a graphic on 'Tin price versus semiconductor sales' click

The prolonged trade dispute between the world's two largest economies, the United States and China, are behind deteriorating prospects for demand from electronics companies which use tin as solder, chemical and battery industries.

"The likelihood of tin demand contracting this year, particularly in China, is high," a fund manager focusing on industrial metals said, adding that too much had been made of a study showing tin to be a major beneficiary of new technology.

"There's no doubt tin demand will grow from things like electric vehicles, but we don't have any detail as the study doesn't give any timelines or tonnages."

The study carried out by Massachusetts Institute of Technology, commissioned by Rio Tinto's (L:RIO) Venture Group shows tin heading a list of metals expected to benefit from new technologies including electric vehicles and robotics.

MIT did not respond to requests for comment.

Rio said the study was presented at a conference in March 2018 to "give a guide to some of the commodities that are required for new technologies and an indication of the types of areas that Rio Tinto Ventures was looking for opportunities". 

(For a graphic on 'Tin consumption' click

Estimates of global tin supply, including recycling, mostly range between 350,000 and 380,000 tonnes this year and expectations are for a small deficit to a balanced market compared with shortfalls around 5,000 tonnes in 2016 and 2017.

"On the supply side, we're expecting things to be remain tight but potentially stable over the next few years," said James Willoughby, analyst at the International Tin Association, adding that interest in recycling was rising.

(For a graphic on 'Tin market balance' click

Tin stocks in LME approved warehouses at 6,450 tonnes after falling to 20-year lows below 1,000 tonnes earlier this year and at 6,910 tonnes in warehouses monitored by the Shanghai Futures Exchange provide cover for a larger deficit.

(For a graphic on 'Tin inventories' click

Supplies from Myanmar peaked in 2016 at 48,000 tonnes, according to consultancy firm Roskill, which estimates that 29,000 tonnes and 22,000 tonnes of contained tin was mined by the country in 2017 and 2018 respectively.

"The emergence of Myanmar a few years ago took the tin market by surprise, volumes increased quite rapidly and pretty much all of that was going into China," said Roskill analyst Jessica Roberts.

"Falling production from Myanmar is a trend. Definitely the tin market needs some new large scale mines to be developed. The most promising at the moment is Bisie."

Bisie is located in the Democratic Republic of Congo in the province of North Kivu and is owned by industrial miner Alphamin. It is ramping up and expected to produce an annualised 10,000 tonnes of tin in the second half of this year.

Disruptions from a strike at Peruvian miner Minsur's (LM:MINi) San Rafael mine had fuelled concern about supply, but the strike ended quickly. San Rafael produced more than 18,000 tonnes last year.

"Established producers such as Brazil and Peru are working hard simply to maintain production as mines age and ore grades decline," said Societe Generale (PA:SOGN) analyst Robin Bhar.

"An incentive price of $25,000 a tonne is required for many new mine projects to proceed, but the pipeline is thin."

(For a graphic on 'Tin supply' click

Shrinking demand to eclipse supply issues in tin market

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
Sign up with Email