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ASIA
Tin price gets a lift
China could ramp up imports
of refined tin as a string of
environmental inspections at
smelters in the world’s top pro-
ducer of the metal curbs local
output.
Officials in eight provinces
last month began inspecting
metals producers including tin
smelters, forcing some to shut-
ter production while they look
to comply with environmental
standards, according to industry
officials and analysts.
The checks come as a crack-
down on pollution spreads be-
yond steel in the country’s mam-
moth metals processing and
mining industries.
“It should have a huge impact
on the whole (tin) industry,” a
trader at a Chinese tin smelter said of the
environmental inspections. He declined
to be identified due to the sensitivity of
the issue.
“It’s part of long-term supply side re-
form not just for the private sector or spe-
cial smelters.”
Affected smelters account for some
45% of China’s annual tin production, or
around 110,000t of capacity, according
to tin industry group ITRI. Global refined
tin output was around 340,600t last year.
ITRI analyst Cui Lin told Reuters that
some producers had cut production from
Myanmar hitting peak tin production
Analysis by ITRI China suggests tin
production in Myanmar is peaking at
50,000 tpa.
In the four years to 2015, it is estimat-
ed tin production from Myanmar has in-
creased tenfold.
Rapid growth from the new mining
centre of Wa county, near the border of
China’s Yunnan Province, is behind the
production spike and accounts for about
95% of production from Myanmar.
Output from Wa seems stable in the
near-term, but with the rainy season from
June-October, production and shipments
are expected to be reduced.
ITRI believes that the big increase in
imports reported by China in the first half
of 2016 (up 88% year-on-year in gross
weight terms) is based on a depletion
third quarter as appetite for tin
grows after the slow summer
holiday season.
Shanghai tin prices reached
13-month peaks in early July at
125,690 yuan/t ($US18,860/t),
while in early August LME tin hit
its highest since early 2015 at
$US18,450/t.
“If the cuts are extended, do-
mestic supply tightness will be
exacerbated in the short-term,
leading to continued upwards
pressure on domestic tin prices,”
ITRI said in a report in July.
An official with Jinlong Min-
ing in Jiangxi province said the
company had brought forward a
Environmental inspections in China could see tin plan to relocate by a week from
prices surge higher late July at the request of the
environmental inspectors after it
July 25 and would not be able to resume failed to meet standards.
full output until August 15 at the earliest. The official added that other smelters
She added that four smelters in Yun- in the region had temporarily suspended
nan province could be shut for longer. production last month due to environ-
Those smelters have a total production mental checks.
of some 42,000t of tin annualised, ac- China produces most of its own tin by
cording to ITRI figures. smelting, importing additional ore from
The cuts in production of tin, used in Myanmar. Its overall refined tin imports
everything from electronics to packag- slumped by 70% in June, and were down
ing, will likely boost imports of refined by 5% at 4,220t for the first six months of
metal from global markets, and have al- the year.
ready helped push local and international – Melanie Burton and Ruby Lian,
prices to their highest in well over a year. Reuters
Momentum is expected to pick up in the
of above-ground stocks of ore and con- ground sources, incurring higher operat-
centrate accumulated over the last few ing costs and lower grades.
years. This masks an underlying decline
in mining activity and depletion of readily Many smaller companies have felt the
accessible higher-grade ore resources. pinch and exited the industry, as bigger
companies investing heavily in mecha-
The longer-term outlook for production nised mining systems and generally
in Wa, where the main mining zone at large operations have thrived.
Man Maw – 90km north-west the capital
Pangsang on the China-Myanmar border The introduction of better technologies
– covers 200sq km, is dependent on new and equipment to process ore has also
discoveries being made in the next few meant allowed for lower grade ore to be
years. Otherwise, production may peak treated as improving tin prices demand
in 2015-2017 and then decline. it and companies looked to make quick
returns on higher grade material.
Wa county production can be meas-
ured by China’s official tin ore and con- Common grades are also down to
centrate import data. In the past two 2-3% tin, compared to 10% in 2014, even
years major changes have occurred in despite the big 7-8% tin deposit recently
Myanmar’s tin industry, with production discovered, which has been mined and
shifting from large open pits to under- resources largely depleted.
AUSTRALIA’S PAYDIRT SEPTEMBER 2016 PAGE 75