China exported 939 tonnes of tin in February and March 2021, the highest monthly tally since April 2019. Cumulative exports over the first quarter from China were 2,151 tonnes, already almost half last year’s count.
China is the world’s largest tin producer but was a steady net importer over most of 2019 and all of 2020. Now imports of tin into China have almost dried up and China became a net exporter over the first quarter of 2021.
The tin market is going through a squeeze. The London Metal Exchange (LME) three-month tin price is hovering just below February’s 10-year high of $27,500 per tonne, last trading at $27,135.
Parts of the world seem to have run out of the metal essential for circuit-board soldering. China is now stepping up as the supplier of last resort, the country flipping from net importer to net exporter of refined tin. This may, as the International Tin Association notes, reflect some demand suppression in China due to the current high price environment.
The rest of the world needs this supply. Super-high prices have so far failed to generate a producer supply response outside of China. Shipments from Indonesia, the world’s largest exporter of tin, slid 24% over the first three months of 2021, extending a downtrend that has been running since 2018.
Indonesia’s top producer PT Timah has guided to lower production and sales this year. It remains to be seen whether the private tin sector can lift production and, equally importantly, get it exported through Indonesia’s tight controls.
In Europe, tin is costing at least $1,000 per tonne over the LME cash price. In the United States, it’s costing at least $2,000 over LME. Taiwanese premiums have also shot up recently to $800-900 per tonne.
Visible inventory in China is higher. Stocks at Shanghai Futures Exchange is currently at 7,512 tonnes, although they have fallen from a March high of 8,853 tonnes in line with the seasonal pattern around the country’s new year holidays. China now holds the key to the immediate price landscape.