Tin Market Update (February 21, 2013)

Industrial Metals

A brief overview of tin price developments, supply and demand and significant market movers.

Tin prices have lost some steam in the past month, with three-month tin declining to $23,925 per metric ton (MT) on the London Metal Exchange, down from $24,810 on January 21, according to data from Metal-Pages. However, prices are still well up from around $17,775 in August.

Most forecasts continue to point to another strong year for tin, which gained 22 percent in 2012, outperforming all other metals on the LME, according to a January 29 Bloomberg article. Continued gains would largely be fueled by surging consumer electronics demand (52 percent of yearly tin production is used in solder, according to the LME) and tightening supplies. Global tin demand will reach about 361,000 MT in 2013, while supplies will clock in around 357,000 MT, leaving a 4,000-MT deficit, according to a Morgan Stanley estimate quoted by Bloomberg.

At the same time, leading producer Indonesia shipped more tin in January in order to take advantage of higher prices: during the month, Indonesian exports of the metal rose 5.4 percent, to 9,154.7 MT, from 8,689.2 MT in December, according to a February 11 Bloomberg article.

However, effective in July, Indonesia will raise its purity standards for exported tin ingots from 99.85 percent to 99.9 percent. That sounds like a small increase, but many of the country’s smelters are expected to have a difficult time meeting the new benchmark, which could cut lower Indonesia’s tin exports for the full year.

“Some tin smelters said they are ready for the new regulation, but some other companies are not,” Toto Rusbianto of Indonesia’s trade ministry said in a December 27 Reuters article.

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