Supply Concerns to Support Tin Price Gains, SMM Reports

SHANGHAI, Oct. 25 (SMM) – Tin prices have been performing quite well recently and will remain firm on low stocks and expectations for tightening supply, despite a strong US dollar, SMM says.

Concerns over tin supply are the biggest driver behind price gains, SMM understands. 

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LME tin stocks fell to less than 3,000 tonnes on October 19, reported at 2,960 tonnnes now. Spot LME tin supply is tightening, with the amounts of tin available for shipments at warehouses at the lowest level in 12 years. 

Indonesia, major tin exporter, is restricting tin exports. The country exported 38,342 tonnes of tin during January-August this year, down 16% from a year ago. Tin exports by Indonesia totaled 70,000 tonnes in 2015, down 30% from around 100,000 tonnes common in years past. 

In China, tin smelters stepped up production earlier this year due to rising tin prices. But, central environmental protection inspections hit output in H2 2016, especially in July and August, with production being hit in major producing regions, such as Jiangxi and Yunnan. The central environmental protection inspection team has launched a new round of checks recently, triggering expectations that supply will fall for the rest of the year. Spot tin prices in domestic market will head toward 135,000 yuan/tonne, SMM expects. SHFE tin, on the other hand, might face downward corrections in the short term, SMM added. Investors need to pay attention to possible impacts on base metals from the US dollar. 

SHFE 1701 tin refreshed a record high of 134,640 yuan/tonne on October 25, pushing mainstream traded prices in domestic spot market up to 133,000-133,500 yuan/tonne. LME tin is approaching previous high of $20,150/tonne.  
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