Tin Prices Holding Up Surprisingly Well While Other Base Metals Sink

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Since May, every base metal has fallen from 8% to 25% during this four-month period with only one exception, tin.

Free Download: Latest Metal Price Trends in the August MMI Report

The metal has held up during this volatile period while commodities sank across the board in the face of bearish market news like China’s stock market decline and the recent yuan devaluation.

How is Tin Holding Steady?

3M LME Tin price 1 year out

Three-month London Metal Exchange tin price, one year out. Graph: MetalMiner.

Two main factors are supporting tin prices:

  • Indonesian’s new regulation this month: New rules only allow refined products from legal mines to leave the country. The country is the world’s largest exporter, and some producers are expected to fail to get the necessary approval, which would lead to lower production and exports.
  • Prices are technically oversold: Tin prices have fallen as much as 45% since the beginning of 2014, being one of the worst performers among industrial metals. When prices suffer a sharp and steady decline it is normal to see a price rebound as short-sellers cover positions and bottom fishers come into the market. Prices need some time to digest losses. We saw this happen this year with other metals such as copper.

So, will prices keep rising?

Although prices could keep rising in the coming months, it seems too optimistic to expect tin to skyrocket.

Indonesia’s export ban could cause some supply constraints, but Myanmar has already proven it can provide enough supply to China’s processing market. On top of that, demand remains weak and while commodity prices are sinking, it’s hard to imagine tin prices consistently rising in the longer term. A few more months of price support might be something more realistic to expect.

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