Industrial Metals

Tin Price Due for a Rebound; Hong Kong Exchanges to Launch Tin Mini Futures Contract

Industrial Metals

Meanwhile, Avalon Rare Metals and Eurotin continue to advance their respective projects.

The tin price has continued to dip in recent weeks, last week dropping 0.3 percent, to US$14,800 per tonne, before falling to US$14,615 on Monday. 
Despite that performance, the tin price is still quite a bit higher than the low of $13,365 it hit in June. Furthermore, according to FastMarkets, the three downward spikes the tin price has seen since April have all been followed by strong rebounds, indicating that a base is now being built.
“Given low LME stocks, we feel an uptrend may well start to unfold — we would not be surprised if prices work back towards $16,500 in the fourth quarter, with support likely around $14,000,” the investment firm states in its tin price analysis and forecast for Q4 2015.

Indonesia tin update

Recent tin price swings have been directly related to the recovery of Indonesian exports. Specifically, new regulations came into effect in the country on November 1, and they caused a delay in shipments, pushing LME tin stocks below 5,000 tonnes — that’s down from a 2015 high of 12,165 tonnes.
The delay in shipments is unsurprising given that just days before the new regulations came into effect, only three companies met the new rules. However, as more smelters receive permits, exports are expected to recover; of course, the speed of the recovery still remains to be seen.
“As more smelters get permits, exports are expected to recover but the introduction of further restrictions on November 1 that force smelters to prove they have been paying royalties and taxes on shipments may further disrupt shipments,” Sucden Financial states in its quarterly metals report.
“Reports suggest that some 65,000 tonnes of tin will be exported this year, down 10,000 tonnes on 2014. In the seven months before the new restrictions were introduced, Indonesian exports totaled 45,707 tonnes, meaning another 20,000 tonnes may be shipped out in August-December,” it adds.

Tin mini futures

In other tin news, Hong Kong Exchanges & Clearing (HKEX:0388) announced last week that it will be introducing a yuan-denominated London tin mini futures contract for trading on December 14, 2015. The contract size will be 1 tonne, and it will be exempt from exchange fees between December 14 and end of day June 30, 2016.
According to the exchange, most of the key contract specifications are based on metals futures offered by the London Metal Exchange. It is now reaching out and inviting market participants interested in acting as liquidity providers for the new contracts.

Company news

Avalon Rare Metals (TSX:AVL,NYSEMKT:AVL) has been working to advance its East Kemptville tin-indium project in Nova Scotia, and provided an update on its $1.3-million work program last week. The program includes diamond drilling in three mineralized zones, as well as environmental and metallurgical work, which will be incorporated in a preliminary economic assessment that is scheduled for completion before the end of November.
Eurotin (TSXV:TINprovided an updated resource estimate for its Oropesa tin project in Southern Spain, announcing a significant improvement in grades due to improved geological interpretation and the inclusion of new drill results.

Securities Disclosure: I, Kristen Moran, hold no direct investment in any of the companies mentioned in this article.
Related reading:
Tin Price Gets Slight Boost; El Nino May Pose a Threat
How Illegal Mining in Indonesia Affects the Tin Price
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