Tin inventory continues to fall..., page-2

It's still falling!

The price has taken a breather yet the LME stock pile continues to reach towards those lows...

The Chinese are back into the market on Monday, it will be interesting to see what that brings to the table. A rally also took place last night so it should be a good day for the ASX.

Back to the tin story...

There's been talk about Chinese stock piling so perhaps they might release some tin to the market although to counteract that, Indonesia's production has dropped due to rain and regulations and San Rafeal's grades are plummeting as it comes to the end of production (see below).

It's going to be an interesting couple of months. Hopefully, CSD starts to swing into gear starting with that EGM announcement.

Some relevant info from ITRI...

Regulation and flooding curb Indonesian tin operations


9 February: Preliminary data from the Indonesian trade ministry has revealed that the country exported 2,486 tonnes of tin in January, down 63% from the 6,770 tonnes exported in January last year, while recent flooding on the island of Bangka is expected to affect tin operations in February.

There are three inter-related regulatory factors currently affecting sales, two of which are new. The first factor is that producers need permission to export (PE) letters, which give them a maximum permissible tonnage they can ship over six months. Some producers used up their initial six months quotas early, so had to stop selling in January prior to renewal of the PE from 1 February onwards.

Additionally, the two new factors are that the provincial government of Bangka Belitung has halted offshore mining activities since 27 January, while new audits of smelters in the province are due to be carried out this week and next by inspectors from the energy and mineral resources ministry.

Bloomberg also reported that flooding on Bangka has restricted access to smelters and mining areas and caused electricity cuts on the island. PT Timah has announced that its Nudur mining area on Bangka has shut due to flooding, although its other mining leases and smelting operations remain unaffected.

China government considering tin stockpile plan

2 February: A spokesman for Yunnan Tin Company told Reuters on Monday that China's government has not yet decided on a plan to stockpile tin after requests from the country's major producers and its industry association.

"The government has not put out substantive measures," Pan Wenhao, board secretary of Yunnan Tin told Reuters. State stockpiling would be the best option for producers, Pan said. He added that another option would be the producers stockpiling the metal themselves but they would also need the government to subsidise the interest payments for commercial loans to cover the cost of carrying the inventory. Pan said the stockpiling would depend on the market situations and the government's policy. He did not provide further details such as the timing and the volume of the stockpiling.

As previously reported, nine leading Chinese tin producers, including YTC announced co-ordinated production cuts of 17,000 tonnes in total for 2016 last week, and called for government stockpiling as part of their announcement. We understand that lobbying for government stockpiling began in earnest in December, but it seems highly unlikely that an official response will be made until after the Spring Festival holidays. Nevertheless there has already been speculation by Chinese traders that subsidised loans could be provided to support the financing of commercial stocks if market conditions remain depressed.

Minsur’s Peruvian production falls in December


11 February: Latest data released by Peru's Energy and Mines Ministry has revealed that tin production by Minsur's San Rafael mine, the country's only tin operation, dropped in December 2015 by nearly 23% to 1,841 mt. According to the ministry, provisional tin output from San Rafael fell 15.6% to 19,511t in 2015 from the year before.

ITRI View: The reduced production is not surprising and is primarily a result of the continuing natural decline in tin grades at the mine. Official production data for 2015 will be released by Minsur in due course.