Tin supply chain tightens after key mine's long absence: Andy Home
By Andy Home
LONDON, Sept 13 (Reuters) -It's been just over a year since the Man Maw tin mine in Myanmar, one of the world's largest sources of the strategic metal, halted production.
While high raw material and refined tin stocks have so far insulated the market from the full impact, that's starting to change.
When the Wa authorities, an autonomous ethnic group controlling most of Myanmar's tin resources, ordered a total suspension of all mining and processing activities in August 2023, most expected the supply hit to last only a few months.
Other smaller mines in Wa territory have since been allowed to reopen. Authorities have also permitted the export of above-ground tin stocks from Man Maw but production remains suspended.
While tin concentrates continue to flow across the border to feed China's smelters, volumes have fallen sharply in recent months, highlighting the lack of activity at the biggest mine.
DARK PRODUCER
The Wa State mines are a statistical black hole in global tin supply data. There are no official production statistics and output can only be inferred from the amount of raw material passing through Chinese customs.
The International Tin Association estimates Myanmar produced around 40,000 metric tons of contained tin in 2022, with Man Maw accounting for around 70% of that.
That makes the Wa State the world's third largest tin producer after China and Indonesia, with Man Maw itself representing 7-8% of global mine supply.
The Wa authorities said the suspension of activities was needed to allow an audit of the tin sector, which has grown exponentially from what began as informal artisanal operations at the start of the last decade.
In this respect the Wa State is no different from any other resource-rich country looking to take tighter control of their assets.
What's unclear is why the audit has taken so long.
REDUCED FLOWS
The impact of the year-long closure is becoming increasingly visible in China's import flows.
China imported 100,000 tons of Myanmar tin concentrates in the 10 months after the start of the audit in August 2023, compared with 173,000 tons in the prior 10-month period.
Trade flows between the two countries slowed to just 11,300 tons in the second quarter of this year from 43,600 tons in the first quarter, suggesting a depletion of above-surface stocks.
Chinese producers have had only limited success in finding alternative sources with increased imports from Australia, Bolivia and Nigeria not enough to plug the gap.
Total tin raw material imports fell by 26% year-on-year in the first seven months of 2024, LSEG data shows.
Chinese smelters have begun adjusting maintenance schedules and tweaking production plans to compensate.
Yunnan Tin 000960.SZ, the world's largest refined tin producer, shut its Geiju smelter for 45 days of maintenance at the end of August.
Others in the provinces of Yunnan and Jiangxi have been reducing output due to a shortage of feed, according to local data provider Shanghai Metals Market.
STOCKS SLIDE
The suspension of tin mining was flagged by the Wa authorities in April 2023, allowing China's tin sector to build up stocks.
Imports of refined tin accelerated over the fourth quarter of 2023 and Shanghai Futures Exchange stocks rose to an all-time high of 17,818 tons in May.
Registered exchange inventory has been sliding ever since and stands at 9,499 tons. Given domestic production is being constrained by growing raw material shortages, the downtrend is likely to continue for the next few months at least.
LME tin stocks have fallen by 39% to 4,725 tons since the start of the year, although as of the end of July there were another 2,207 tons of shadow stocks sitting in LME warehouses.
The Western supply chain has been more affected by slower Indonesian shipments than by the Man Maw situation. Indonesian exports fell by 44% year-on-year to 24,600 tons in the January-August period due to early-year permitting delays.
RISK PREMIUM
The tin market has been lucky with the timing of Man Maw's suspension.
Half of global usage is in the form of solder for circuit-boards, meaning demand is highly sensitive to electronic goods sales.
Semi-conductor sales, a useful proxy for tin solder demand, are only now emerging from a prolonged two-year slump, which helps explain why global tin stocks were so high in the first half of 2024.
Tin has still outperformed every other LME-traded metal by some margin. LME three-month tin CMSN3 was trading at $31,770 per ton on Friday, up by 25% from the start of January. The next strongest performer, copper, has year-to-date gains of just 8%.
It's clear that the tin price contains a Man Maw risk premium and will continue to do so until the Wa authorities permit a return to normal operations.
Only the Wa leadership knows when that will be and they may be focused on other matters.
Although the United Wa State Army is not directly involved in the ongoing civil war raging across Myanmar, Man Maw may not be top of the priority list.
The opinions expressed here are those of the author, a columnist for Reuters.
China's imports of tin concentrates fall after Myanmar mine suspension https://tmsnrt.rs/4d2W8qv
Global tin stocks fall from their May peak https://tmsnrt.rs/3zpH2NW
Tin is the star performer of the LME base metals in 2024 https://tmsnrt.rs/4gott1R
Editing by Alexander Smith
تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
