By Anil Mathews (ScrapMonster Author)
August 01, 2016 07:57:18 AM
BEIJING (Scrap Monster): The environmental inspections by Chinese administration have resulted in sharp drop in refined tin output by Chinese tin smelters. Meantime, tin exports by Myanmar recorded marginal decline during the month of June this year. On the other hand, Indonesia’s exports of refined tin surged higher during the month.
The Chinese administration began environmental inspection at eight major provinces starting July 19th. The inspections have led to centralized shutdown of smelters in many provinces including Yunnan, Guangxi and Jiangxi. The smelters in these provinces have either suspended operations or scaled back their production. This has resulted in supply tightness. The plant relocations and maintenance operations recommended by environmental inspectors are likely to keep the smelters idle for probably long periods. For instance, the Guangxi China Tin Group announced a month-long maintenance shutdown of its smelter on July 15th. The shutdown is likely to extend to more than a month in certain cases, with many mills not yet clear on possible restart dates.
The supply tightness has led to sharp rise in domestic tin prices. The tin spot prices recorded a rise of nearly 3% from around 117,000 yuan during last week to as high as nearly 121,000 yuan on Wednesday. According to market participants, extension of production cuts will further aggravate the supply tightness of the metal, which in turn may lead to further rise in Chinese domestic tin prices.
The latest customs data indicates that the imports of tin ore and concentrates by China totaled 39,044 tonnes gross weight during the month of June this year, with imports from Myanmar totaling 38,936 tonnes. The tin exports from Myanmar to China dropped slightly by 4% when matched with the month before. The cumulative tin ore and concentrate exports by Myanmar to China during the first half of 2016 rose significantly by 88% over the previous year to 254, 120 tonnes.
The marginal drop in Myanmar’s exports is partially on account of temporary suspension of operations at the Heinda and Bawapin mines in the Southern region. The export level is expected to remain subdued until October this year, mainly on the back of upcoming rainy season in the country, which is feared to impact the production and transportation activities. The suspension of activities at the two mines in the southern region is likely to have limited impact on overall exports, as the region accounts only for less than 5% of the country’s tin output.
Meantime, the preliminary statistics released by the Indonesian Trade Ministry suggests strong rebound in refined tin exports by the country during the month of June this year. The exports totaled 7,652 tonnes, rising sharply by 42% when compared with May this year. The Ministry data states that the country’s refined tin exports touched the highest level in 2016 during June. The cumulative exports during the initial half of the year 2016 totaled 29,650 tonnes, down by over one-fourth when compared with the corresponding six-month period in 2015. The country’s refined tin output is likely to total between 60,000 tonnes and 65,000 tonnes during the entire year 2016.