18 March, 2016
Tin in the News
While the LME tin price has this week remained near the top of its recent trading range, it must be pointed out that the big price revival in February and early March was heavily influenced by trend-following investment fund buying. The latest Nanolytics report published on Monday by LME brokers Marex Spectron estimated that the net speculative long position at the end of last week was some 3,800 lots, equivalent to over 30% of open interest. Because of the relatively small size of the tin contract, shifts in speculative positions over the last year have had a significant influence on prices. There is now a risk that any bearish news affecting tin or commodities generally could result in a significant fund sell-off.
In this week's news we summarise activities of 2015's top ten refined tin producers and provide details of South Korea's recent tin stockpile purchases. We also report on a new agreement for acquisition of the South Crofty tin project in the UK
Tom Mulqueen - Analyst, Markets
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The top 10 refined tin producers of 2015
15 March: ITRI reports that nine of the top ten refined tin producers saw a fall in production in 2015, including all of the big four companies.
All Chinese companies in the top ten saw refined production fall in 2015. Despite the continuing increase in supply of tin ore and concentrates from Myanmar, domestic mine production and secondary refined tin production both faltered during the year due to low tin prices. Refined tin production is expected to fall further again this year following the announcement of a combined 17,000 t of production cuts by Chinese smelters in mid-January.
In Indonesia, PT Timah saw a 32% year-on-year increase in refined tin production to 14,261 t in the first half of 2015, but production fell 7.7% to 13,170 t in the latter half of the year, likely due to the introduction of new regulation on exports in August and lower tin prices. Refined tin production and exports from both PT Timah and the private Indonesian smelters continue to be restricted by delays to applications for export permits in early 2016 and this is expected to result in a further reduction in total refined tin production from the country this year.
In 2015 refined tin production by Minsur in Peru declined by 17% to 20,224 t, largely due to a fall in head grades from the San Rafael Mine to 2.05%, compared to 2.48% Sn in 2014. However, refined tin production from Minsur's Brazilian operations rose 10% to 5,525 t in 2015. Minsur's consolidated refined tin production is expected to increase in 2016, with company guidance of 20,000-21,000 t from San Rafael and 6,000-7,000 t of tin from the Pitinga mine in Brazil.
EM Vinto in Bolivia was the only company in the top ten to announce an increase in refined tin production last year; up 3.2% to 12,106 t. Production capacity at the company's smelter was increased following commissioning of a new Ausmelt furnace in September. The company has anticipated production of 14,000 t of refined tin in 2016.
Korea makes first stockpile purchase of 2016
18 March: South Korea's Public Procurement Service (PPS) made its first tin purchase this year on 15 March, buying 200 tonnes of standard grade low lead MSC metal by tender from Daewoo International at a c.i.f. premium to the LME price of $494. This is the first time that the agency has held a tender since November 2015.
Total stockpile purchases in 2015 amounted to 2,000 tonnes, a similar volume to recent previous years. The PPS is a state organisation providing a purchasing and stockpiling service for small and medium sized enterprises in Korea, and maintains a tin stockpile of around 3,000 tonnes.
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