Much of the news in the last week has been surrounding the Omicron variant of COVID-19, and how this will affect markets. Tin has managed to take the news reasonably well in stride, with LME 3-month prices currently just some US$ 1,500/tonne below the new high set on 25 November of US$ 40,200/tonne. Tin stocks continue to rise, likely on account of stable demand and moderate supply improvements, bringing the backwardation in to levels not seen since mid-September.
Some 20,000 tonnes of tin is likely to come online in the next decade, but investment in up to three times that could be required to meet rising demand. Despite strong exports to China in October, the outlook for tin supply from Myanmar is weakening due to another outbreak of COVID-19.
The latest data from China’s customs office suggests that the country imported some 6,000 tonnes of tin-in-concentrate in October, up 30% compared to September. Of this, some 4,300 tonnes were from neighbouring Myanmar, up 28% month-on-month.
In September, tin shipments were delayed due to limited transportation availability amidst strong demand for rubber. However, logistics improved in October, with container weight limits lifted to 60 tonnes per container rather than the previous 32 tonnes, allowing for greater tin exports.
Nearly a quarter of the material exported in October is thought to be from government stockpiles (some 1,500 tonnes), according to local ore traders. Mining in the country remains constrained.
However, the outlook is worsening, with another COVID outbreak in the country forcing China to stop all trade through the Menglian port to cease. The port was closed on 10 November and was expected to reopen on 19 November. The situation has not improved, however, and so the closure has been extended for a further 14 days – possibly into early December.
The closure of the main tin trading port between China and Myanmar in November could see the monthly total fall considerably. However, this material is only likely to be delayed, and so the December total could jump significantly.