Tin Price 2016: Riding a 20-month High as Inventories Fall

Tin has hit its highest price in 20 months after inventories dwindled, according to Reuters.
Falling shipments from Indonesia – a leading tin exporter – as well as doubt about sustainable mining in Myanmar fostered a spike for the metal this week.  Currently, supply is not adequate to meet the growing demand especially from China, the biggest metal consumer, which also lead to higher prices.
Tin for delivery in three months added 0.3 percent to settle at $19,810 a metric ton at 5:50 p.m. in London on Wednesday after touching $19,950. Prices went up 11 percent in the past two months and 37 percent year-to-date, the highest since January 2015. Stockpiles of tin for delivery fell 5.2 percent to 3,460 metric tons, the lowest since November 2008.
“On-warrant” tin inventories (metal not earmarked for delivery and available to investors) approved by the London Metal Exchange has dropped to 1,625 tonnes, LME data showed. One analyst told Reuters that the rally may be capped – but only if inventories that are unregulated by the LME start selling on the market.
***This is an updated version of an article originally published on July 19, 2016. Please scroll to the top for the most recent news.***

Tin prices are on the rise, but the metal’s good fortune may not continue for much longer.
According to the latest FocusEconomics Consensus Forecast Commodities report, tin prices have enjoyed support from higher demand in China, as well as lower exports from Indonesia, the world’s second largest tin producer. Strong government regulation in Indonesia, specifically stricter mineral export rules implemented in early 2014, have kept a lid on the country’s output.
However, there’s been talk that Indonesia may ease the rules, and FocusEconomics sees an increase in output from Indonesia leading to a drop in pricing “in the near future.”
“The Association of Indonesian Tin Exports expects tin shipments to increase in the coming months and total 66,000 metric tons on average this year,” the firm wrote.
Similarly, Shanghai Metals Market reported that 50 percent of Chinese traders predicted that tin prices would drop this week.
Tin was trading at US$17,824 per metric tonne on July 8, up from around $13,500 per metric tonne in the second half of last year. Here are a few analyst predictions of the average tin price for the third quarter of this year, as per FocusEconomics:

• CPM Group; $16,650
• Macquarie; $15,750
• Société Générale; $17,000

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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.