Tin prices will likely remain elevated for the rest of this year as Myanmar’s Man Maw mine is yet to be reinstated and exports from Indonesia were disrupted during the January-June period, experts say.
The price of tin, a white soft-silvery metal used in soldering, for plating steel cans and in bearings, has increased by over 20 per cent in 2024. On the London Metal Exchange, the three-month tin contract was quoted at $30,850 a tonne. For cash, the metal was quoted at $30,875 a tonne.
According to Tom Langston, Senior Market Analyst at the International Tin Association (ITA), tin has recovered from its July low and increased 9 per cent in August. Speculation in tin has increased over the past few weeks, rebounding from oversold conditions.
Indonesia exports down 54% YoY
Research agency BMI, a unit of Fitch Solutions, said on the one hand, 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.
“On the other hand, Indonesian tin exports have faced significant disruption in H1 2024, with delays in approvals of mining companies’ annual work plans, known locally as RKAB, causing significant panic among market participants,” it said.
According to the ITA, According to the International Tin Association, Indonesia, the world’s largest exporter and second-largest producer of refined tin, exported only 14,752 tonnes of refined tin in the first half of 2024, less than half of the total in H1 2023 and a 54 per cent year-on-year decline.
Price forecast
BMI said because of these developments, it has raised its tin price forecast for 2024 from an annual average of $28,000/tonne previously to $30,000, as supply concerns drove tin prices to an unprecedented year-to-date high of $36,050/tonne on April 22.
“Prices remain elevated as of August 28 despite ebbs and flows as supply concerns persist,” the research agency said.
Langston said the (tin price) uptick occurs amidst recent market volatility and mixed macro signals including anticipated Fed rate cuts starting in September and persisting weak economic data from China.
The Procurement Resource website said tin prices are expected to continue rising in the coming months as well. “... the alarming supply situation amidst rapidly depleting inventories will guide tin prices upwards,” it said.
Myanmar ‘in-kind’ tax
BMI said, “On the supply side, first, the Man Maw mine remains closed as of August 28 despite the mining ban in Myanmar having been lifted on January 4 2024.”
Procurement Resource said the Man Maw Mine remains closed despite a tax policy change in Myanmar. ITA said a “30 per cent in-kind tax” was imposed in February this year on all grades of tin concentrate exports.
BMI said the combination of a fall in Myanmar’s tin exports and disruptions to Indonesia’s exports of tin significantly boosted sentiment for most of 2024 to date. “...but we expect this to now stabilise as Indonesia’s tin exports get back on track over the coming months,” it said.
Langston said tin fundamentals remain robust as the feedstock market in China tightens and Indonesian supply takes time to recover.
Semiconductor sales rise
BMI said it expects some resilience on the demand side in the remaining months of 2024 as global semiconductor sales are now showing signs of a pick-up, and remain historically high.
“In April 2024, Taiwan Semiconductor Manufacturing (TSM), the world’s largest contract chipmaker, announced a 16.5 per cent year-on-year rise in its Q1 revenues during its Q1 2024 earnings report. The company manufactures semiconductors for clients including Apple, AMD, Qualcomm and Nvidia,” said the research agency.
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, it said.
Global tin stocks have started declining in recent months, especially stocks at the Shanghai Futures Exchange, BMI said.