Back in June, we reported that tin had been in a free-fall for most of the past year. In 2014, the metal declined 15% and as of June 2015, prices were down 24% year-over-year. Simply put, it did not look good for tin producers heading into July.
But then July happened. Tin outperformed all metals last month, and even nearly breached our short-term resistance level of $16,500/mt, with one day even trading as high as $16,600/mt.
Want to know what August has in store for tin?
Indonesia Export Quantities: The Story for Tin in August
The world’s top exporter of tin, Indonesia, ramped up its export activity in July, but local smelters are preparing for a sharp tail-off in August amid reports that a new export rule is about to go into effect.
“Many of the smelters don’t have the new license yet,” Jabin Sufianto, president of the Indonesian Association of Tin Exporters (AETI) told Reuters. “There have been delays in the new regulation from the government.”
These new export rules and licensing requirements are expected to underpin prices of the metal.
“If you can’t export the tin ingot, your cash flow will be affected,” Sufianto added. “So I believe the production will be lower, and as an impact, the price will increase. But I don’t think it’s going to be a huge problem because the government will help us getting our licenses.”
The reason for these new regulations stem from the Indonesian government expressing concern over illegal activity related to tin mining and smuggling, and the subsequent negative effect on the environment it can have.
The London Metal Exchange responded in June, with tin prices up nearly 10%. However, according to Reuters, stagnant demand from the electronics sector and neighboring country Myanmar picking up the slack, should offset any significant price gain for tin.
So What Should My Industrial Buying Strategy Be?
You can find a more in-depth tin price outlook and forecast in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds: