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Tin prices have rebounded to above $26,500 a tonne over the past fortnight on threats to supplies from key producers and demand outlook turning positive.
“Despite a recent tax policy change in Wa state (Myanmar), the tin mines of the Man Maw mining area remain closed. Indonesian exports are now significantly delayed with still no trading activity on either the ICDX (Indonesia Commodity Derivatives Exchange) or JFX (Jakarta Futures Exchange) since the turn of the year,” said Tom Langston, Tom Langston, Senior Market intelligence Analyst, International Tin Association(ITA).
Uncertainty over the licensing situation continues further complicated by ongoing police investigations and the recent presidential election in Indonesia, he said.
Speculative interest
On Tuesday, three-month tin futures on the London Metal Exchange (LME) were quoted at $26,824 a tonne. Prices have rebounded from $26,170, a two-week low witnessed a fortnight ago. On the Shanghai Futures Exchange (ShFE), tin April futures ended at 219,910 Chinese yuan a tonne ($30,550) on Wednesday.
Langston said speculative positions for tin have surged to 1,116 contracts net long, reaching a peak not seen since the initial speculative support over the mining suspension in Myanmar last July. On ShFE, the open interest was 25,846 for April and 15,856 for May, signifying speculative interests in the metal as the positions rises for the May contracts.
The Trading Economics Website said delays in approving annual mine work plans in Indonesia led to a near halt in exports in January, down from 6,000 tonnes in December 2023.
Myanmar’s significance
Uncertainty over production in Myanmar Wa State continues. In August 2023, the Myanmar junta banned mining from the State, which makes up 70 per cent of Yangon’s output and is a significant supplier to China.
US research agency BMI, a unit of Fitch Solutions, said Indonesia’s tin ingot export ban will continue to ensure the global tin market remains tight in the coming months, and prices do not collapse.
“While mining at the Man Maw mine, accounting for almost all of Myanmar’s tin supply, has not been reinstated yet despite the ban being lifted for all other mining operations from January 4, negotiations are ongoing and we expect a decision to be made in the coming weeks,” the research agency said.
Semicon, tech sales picking up
The developments will likely lead to a 5,000-tonne deficit in 2023 from a 6,000-tonne surplus in 2023. Rising semiconductor and technology sales, particularly in artificial intelligence and automotive chips, are expected to support tin prices in the coming months, Trading Economics said.
On the consumption side, BMI said global semiconductor sales data show that the decline in demand for semiconductors since mid-2022 has reached its trough, with sales increasing steadily since July 2023.
Earlier this year, the research agency said it had lowered its tin price forecast for 2024 to an average of $26,000/tonne from $28,000 previously, as prices start the year from a lower base on news of an easing mining ban in Myanmar.
“In the long term, prices will continue on an upward trend as demand remains robust and the market remains tight,” said BMI.
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