SRZ - Media, page-26

Short Squeeze Fears Grip Tin as LME Says It’s Watching Market

So precarious is the tin market that in previous bouts of tightness it has always found a way out. However, something feels very different this time. Up 5.73% overnight to US$35,925 (3mth)

What’s going on in the Tim market now is bewildering to say the least. The MIT and Rio Tinto jointly created a beautiful forecast diagram of all commodities at high risk in 2018, with Tin coming in first. And here we are in 2024, with a projected 50% shortage already in place and minimal media attention: The production of refined tin and concentrates fell short by 22% in 2023. When we include the non-tin production from Indonesia and Myanmar, which accounts for 34% of the world's tin concentrates, the total is ~ 50% or more.

For any given commodity, low grades and diminishing reserves from the current mines are sufficient justification for attracting investment and starting new mines, however, that has not been the case for Tin. The immediate short-term issue is that there is now a dire shortage and very little supply of the metal outside of China. It is now realised that when mines are shut down, it takes many, many months for them to start up again and to be operating at an efficient and sustainable capacity. Therefore, it should come as no surprise that during the last few days one trader holds a tin futures position equal to more than 90% of the volume stored in LME warehouses.

Every product manufacturer in the world depends on the tin market, solar panels, EV, IT, any electronic device, etc, etc. Even a minor supply disruption in the Republic of Congo has added to the squeeze. With May contract due to expiry and fast approaching, its almost impossible to see a quick fix.

Even if you consider SRZ a company on the make, it is still a good year away from producing.

AIMO, DYOR GLTA(patient)H