Tin Seen Tight in 2011 Despite Japan Demand Fall-Shanghai Metals Market

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Tin Seen Tight in 2011 Despite Japan Demand Fall

Industry News 10:01:33AM Mar 23, 2011 Source:SMM

Mar. 23 -- Japanese tin demand will fall around ten percent this year following the earthquake and tsunami, but the global market will still be in deficit as mine supply struggles to match global consumption.

"We'd certainly expect to see a significant fall in Japanese demand this year, probably 10 percent or perhaps more," Peter Kettle, manager of statistics and market studies at UK-based consulting firm ITRI, told the Reuters Global Mining and Steel summit.

Despite the decline in Japanese off-take, Kettle still saw the global tin market in deficit this year as consumption in other major users continues to grow and supply remains constrained after decades of lack of investment in new mines.

"We definitely see a tight supply situation in the next two to three years," he said.

It is still difficult to say precisely how much consumption will be lost in Japan, Kettle said, adding that the picture would only become clearer in two to three months.

Japanese demand for tin, used in tinplate and electronic solders, totaled 32,000 tons last year, or about 9 percent of the world total of 360,000 tons.

In any case, growth elsewhere will keep consumption growing.

Demand in top consumer China, for example, is expected to rise by 5 percent this year, after a 13 percent jump in 2010.

In mid-February, London Metal Exchange (LME) tin prices

reached an all-time high of $32,799 a ton. They were last indicated at $30,075 a ton.

ITRI is in the process of reviewing its forecasts for the tin market but sees further potential price gains.

"We could see another step up in prices over the next couple of years ... but the chances of them being sustained much above $40,000 a ton are fairly remote," Kettle said. High prices bring the threat of substitution. Tin's use in PVC stabilizers, where it helps prevent frames of double-glazed windows and doors from fading, is most immediately at risk because of readily available alternatives such as zinc, calcium and barium.

But Kettle said a big worry was for consumption of tin in tinplate and solder, the main uses, in five to ten years' time.

In tinplate, for example, which accounted for about 16 percent of demand last year, even thinner coatings might be used.

So far high tin prices have stimulated a limited supply response, mainly from small-scale miners in Indonesia and recycling activity in China.

The tightness will start to ease only around 2013.

"In terms of new mines opening up, we've still got quite a long way to go, probably two to three years, before large scale mining starts up," said Kettle.

Aside from a new mine in Argentina, where tin will be produced as a by-product of silver, many mine projects are not yet at the feasibility stage.

One of the most advanced is in Kazakhstan, which could start up in around two years and produce some 6,000 tons per year of contained tin, according to Kettle.

Further down the line, other fairly sizeable projects are being looked at, including two in Saxony, Germany, which could produce around 3,000 tpy of the metal.

High prices have also stimulated interest in the tin industry among some private equity firms and junior miners, Kettle said.

"People are looking for investment opportunities, we're getting more and more enquiries about how to get into the industry."

 

Key Words:  tin  

Tin Seen Tight in 2011 Despite Japan Demand Fall

Industry News 10:01:33AM Mar 23, 2011 Source:SMM

Mar. 23 -- Japanese tin demand will fall around ten percent this year following the earthquake and tsunami, but the global market will still be in deficit as mine supply struggles to match global consumption.

"We'd certainly expect to see a significant fall in Japanese demand this year, probably 10 percent or perhaps more," Peter Kettle, manager of statistics and market studies at UK-based consulting firm ITRI, told the Reuters Global Mining and Steel summit.

Despite the decline in Japanese off-take, Kettle still saw the global tin market in deficit this year as consumption in other major users continues to grow and supply remains constrained after decades of lack of investment in new mines.

"We definitely see a tight supply situation in the next two to three years," he said.

It is still difficult to say precisely how much consumption will be lost in Japan, Kettle said, adding that the picture would only become clearer in two to three months.

Japanese demand for tin, used in tinplate and electronic solders, totaled 32,000 tons last year, or about 9 percent of the world total of 360,000 tons.

In any case, growth elsewhere will keep consumption growing.

Demand in top consumer China, for example, is expected to rise by 5 percent this year, after a 13 percent jump in 2010.

In mid-February, London Metal Exchange (LME) tin prices

reached an all-time high of $32,799 a ton. They were last indicated at $30,075 a ton.

ITRI is in the process of reviewing its forecasts for the tin market but sees further potential price gains.

"We could see another step up in prices over the next couple of years ... but the chances of them being sustained much above $40,000 a ton are fairly remote," Kettle said. High prices bring the threat of substitution. Tin's use in PVC stabilizers, where it helps prevent frames of double-glazed windows and doors from fading, is most immediately at risk because of readily available alternatives such as zinc, calcium and barium.

But Kettle said a big worry was for consumption of tin in tinplate and solder, the main uses, in five to ten years' time.

In tinplate, for example, which accounted for about 16 percent of demand last year, even thinner coatings might be used.

So far high tin prices have stimulated a limited supply response, mainly from small-scale miners in Indonesia and recycling activity in China.

The tightness will start to ease only around 2013.

"In terms of new mines opening up, we've still got quite a long way to go, probably two to three years, before large scale mining starts up," said Kettle.

Aside from a new mine in Argentina, where tin will be produced as a by-product of silver, many mine projects are not yet at the feasibility stage.

One of the most advanced is in Kazakhstan, which could start up in around two years and produce some 6,000 tons per year of contained tin, according to Kettle.

Further down the line, other fairly sizeable projects are being looked at, including two in Saxony, Germany, which could produce around 3,000 tpy of the metal.

High prices have also stimulated interest in the tin industry among some private equity firms and junior miners, Kettle said.

"People are looking for investment opportunities, we're getting more and more enquiries about how to get into the industry."

 

Key Words:  tin