Local Tin prices soared over 20% in China

By Anil Mathews (ScrapMonster Author)

December 29, 2015 07:46:37 AM

BEIJING (Scrap Monster): The Chinese local Tin prices have surged higher by over 20% during the past ten days. Heavy arbitrage buying was witnessed on Shanghai Futures Exchange (SHFE) on account of the big gap when compared with LME prices.

The surge in prices led to huge increase in trading volumes of SHFE tin contracts. This in turn has lifted the spot market price of physical tin. The spot tin ingot prices recovered sharply from RMB 83,000 yuan ten days ago to as high as RMB 100,000 yuan end-last week.

The price difference between Chinese domestic tin and LME price led to sudden rise in exports of tin ingots and products during end-November and early-December. Incidentally, Chinese domestic tin prices were much lower when matched with LME prices. As per estimates, nearly 2,000 t of tin ingot and products were exported during this period.

At the same time, tin raw material supplies have continued to remain extremely tight. Sources indicate that Chinese imports of tin concentrate touched new record during November this year. However, mine supply has dropped significantly. Yunnan Tin has closed a few of its high cost mines recently. In addition, most private mines have shuttered their operations. The closure of Southern Mines in Hunan province has cut the supply drastically. The operations have been closed since June this year on charges of environmental pollution.

Meantime, Chinese tin imports during Nov ’15 totaled 38,150t of tin concentrate (gross weight). The imports are up significantly by 32% when compared with the previous year. The cumulative import during the eleven-month period of the year has exceeded 247,000t, with tin content of around 40,000t. The country’s largest supplier of concentrates during the month was Myanmar.