The tin market in London remained tight last month and the underlying problem appears to be a lack of deliverable metal.
According to a recent Reuters report from Andy Home, a closer look at China reveals a significant supply of tin registered with the Shanghai Futures Exchange, but it previously was hiding behind the country’s 10% export duty.
Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Subscribe to our monthly buying outlook reports!
However, that doesn’t appear to be the case any longer as China evidently removed the barrier without notification, which could lead to serious consequences for the worldwide flow of tin and, more specifically, the London Metal Exchange market.
Home writes: “There is still a good deal of uncertainty as to what exactly may, or may not, have happened. But tin industry body ITRI has drawn attention to the fact that the tin export duty has not been referenced in China’s 2017 Exports Commodities Tax Rates table.”
Home adds the reason for China dropping the duty, a standard for nearly 10 years, can be attributed to the US-filed complaint last July to the World Trade Organization regarding their export duties on numerous metals and minerals, including tin.
Tin Price Update for February
Just last week our own Raul de Frutos wrote tin prices dropped 9% since the beginning of the year, reaching a 5-month low.
de Frutoes wrote: “There are two factors driving this decline:
- Profit taking: Prices rallied near 70% in 2016 and prices need to digest those gains.
- Speculation that China has removed it’s 10% export duty on refined tin exports.”
How will tin and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds: