Tin continues to be the unexpected star performer of the industrial metals this year. While the broader metals recovery rally shows signs of flagging, tin keeps punching out fresh all-time highs on both the London and Shanghai markets, Reuters reports.
Last week, London Metal Exchange (LME) three-month tin touched $35,955 per tonne, eclipsing the previous record of $33,600 dating from 2011. Currently trading around $35,400 per tonne, tin is up 68% on the start of the year. Aluminium is trailing a distant second with year-to-date gains of 27%.
One of the main reasons for this surge is paucity of visible stocks of tin in the world. Physical supply chains also remain stressed.
Physical tin users in the United States, which finds itself at the wrong end of a freight-disrupted supply chain, are paying $4,000 per tonne on top of the LME price, if they can find anyone with anything to sell. European consumers are paying an extra $1,500-$2,000 per tonne for physical metal, the highest premium since Fastmarkets started its assessments in 2009.
Stocks registered with the Shanghai Futures Exchange (ShFE), meanwhile, have slumped to their lowest levels since late 2016, when the tin contract was still in its infancy. ShFE warehouses held 8,853 tonnes of registered tin in March. The current count is just 1,542 tonnes.
The tightness in Chinese stocks appears to have been caused in part by a wave of exports as metal was drawn out of the country by the extreme cash premium available for LME delivery.
China exported 8,454 tonnes of refined tin in the first half of the year, up from 2,135 tonnes in the first six months of 2020. The country has swung from net importer last year to net exporter to the tune of 5,800 tonnes so far this year.
China’s national production of refined tin fell month-on-month to 12,000 tonnes in July, according to state-backed research house Antaike. Yunnan Tin has this month restarted its smelter, which should alleviate the local tightness in the weeks ahead. But whether there will be sufficient metal for China to keep exporting at the rate seen in the first half of the year remains to be seen.