After trading sideways for nine consecutive months, tin prices finally succumbed.
Although other sources were calling for higher prices in 2016, in our monthly and annual outlooks we continued to recommend buying only small quantities. In the face of a rising dollar, China’s slowdown and falling commodity markets, tin buyer should only expect downside moves.
In November, Indonesia introduced new rules requiring tin exporters to obtain new “clean and clear” (CnC) certification. Many firms ramped up exports ahead of it. Indonesian exports from January-November dropped by 1.9% compared to the same period last year, a somewhat negligible result. However, exports in December exceeded 10,300 metric tons, whereas December 2015 exports are unlikely to reach half of last year’s total. Despite lower Indonesian exports in 2015. More production from Myanmar offset the difference of Indonesia’s drop.
Thanks to already low prices and decreased Indonesian exports, tin prices held well over the past nine months compared to the rest of the base metals. However, 2016 might bring a different picture. Indonesian exports will likely recover as more companies get CnC approval and, with the ongoing Chinese stock market crash, we can only expect tin prices to head south after breaking key support levels while demand, globally, weakens.