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