Surprise Blanket Ban on Tin Exploration in Myanmar Bears Fruit to Help Tin Prices Skyrocket, Will This Reverberation Continue?

SHANGHAI, Apr 26 (SMM) – According to foreign news on April 25, the Central Economic Planning Commission of the Wa State in Myanmar issued a document this month stating that the mining and excavation of all mineral resources in the Wa State will be suspended from August 1.

In the wake of the news, tin futures prices surged 15% to hit a 10-week high. But oversupply in the market and high inventory may offset the worst negative impact of the ban in the short term.

LME 3-month tin hit $28,440/mt last Tuesday, its highest since Feb. 3. The futures closed down 4% at $25,584/mt this Tuesday.

The International Tin Association (ITA) estimates that the Wa state accounts for about 10% of the global supply of tin concentrate. China accounted for about 47%, or 181,000 mt, of tin consumption last year, of which 47,700 mt, or 26%, was in Myanmar.

Surprise Blanket Ban on Tin Exploration in Myanmar Drove SHFE Tin Prices to Soar

"The restrictions from August will quickly push the market into deficit, but the magnitude and duration of the shortage (potentially forward stockpiling) is still uncertain.”

Macquarie had forecast a tin market surplus of 5,000 mt this year, compared with global demand of 362,000 mt in March.

More than half of the world's tin supply is used as solder for circuit boards in the semiconductor industry, which is expected to consume less tin due to a slowing economy and lower spending on consumer electronics.

"Stagnation in demand from China, while potential supply increases from countries like Peru and Congo mean the impact of any ban in Myanmar will be limited," said a fund manager focused on the metals market.

San Rafael de Minsur, the world's fourth-largest tin mine in Peru, recently resumed operations after about 10 weeks of suspension due to protests.

Tin production at Alphamin Resources in the Democratic Republic of Congo rose 14% year-on-year to 12,493 mt last year.