Pressure building in the tin market?Presentation overview. Tin price versus other LME metals 0 100...
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DATE: PREPARED BY: PREPARED FOR: Pressure building in the tin market? 25 May 2017 Cui Lin SHFE Conference
Transcript of Pressure building in the tin market?Presentation overview. Tin price versus other LME metals 0 100...
DATE: PREPARED BY: PREPARED FOR:
Pressure building in
the tin market?
25 May 2017 Cui LinSHFE Conference
2016 in review
Recent market trends
The outlook for supply and demand
Summary
Presentation overview
Tin price versus other LME metals
0
100
200
300
400
500
600
Jan
-00
Jan
-01
Jan
-02
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Jan
-14
Jan
-15
Jan
-16
Jan
-17
Ind
ex
LME and Tin price index
LME Tin
Index 2000 = 100
85
90
95
100
105
110
115
120
125
3-J
an
-17
10
-Jan
-17
17
-Jan
-17
24
-Jan
-17
31
-Jan
-17
7-F
eb
-17
14
-Feb-1
7
21
-Feb-1
7
28
-Feb-1
7
7-M
ar-1
7
14
-Mar-1
7
21
-Mar-1
7
28
-Mar-1
7
4-A
pr-1
7
11
-Apr-1
7
18
-Apr-1
7
25
-Apr-1
7
Copper Aluminum Zinc
Lead Tin Nickel
LME base metals price index in 2017
Manufacturing PMI Index
46
48
50
52
54
56
58
Jan
15
Mar
15
May
15
Jul 1
5
Sep
15
No
v 1
5
Jan
16
Mar
16
May
16
Jul 1
6
Sep
16
No
v 1
6
Jan
17
Mar
17
USA EU China Japan
Index numbers above 50 indicate growth
Positive growth in 2016, now slowing
0
50
100
150
200
250
300
350
400
4502
00
0
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
China
Japan
Other Asia
USA
Other Americas
Europe
Other
World refined tin consumption 2000 – 2016e’000 tonnes
Headline
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
Others
Lead-Acid
Glass
Copper Alloys
Chemicals
Tinplate
Solders
China consumption increasing slowly
Tonnes refined tin use
• Solder use in minor applications (photovoltaic cell, LED) has increased, offsetting the impacts of miniaturization
• Tin chemical use had a big growth with strong demand in US, South Asia and China
Changes in 2016 tin mine production
tonnes
-6,000 -4,000 -2,000 0 2,000 4,000
China
Bolivia
Indonesia
Peru
Australia
Other
Brazil
Africa
Myanmar
Total World
Headline
0
20
40
60
80
100
120
140
160
180 Crude tinimports for re-refiningSecondaryrefined tinproductionConcentratesimports
Unreportedmine production
Reported mineproduction*
Supply increase was wholly from imported concentrate
Data: ITRI, CRU,CNIA
Sources of China tin raw materials, ’000t
* Official mine production data has ceased to be published since 2013.
• China imported around 61,000t tin concentrate and ore in 2016
• Mine production and secondary refined tin in China reduced in 2016
• Refined tin production in China was also impacted by environmental control
HeadlineMine production decreased significantly
0
20,000
40,000
60,000
80,000
100,000
120,000
2008 2009 2010 2011 2012 2013 2014 2015 2016
China mine production by province
Inner Mongolia
Jiangxi
Guangxi
Hunan
Other
Yunnan
Tonnes of tin-in-concentrate
Headline
-10,000
-8,000
-6,000
-4,000
-2,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
China market balance
China refined tin stock relatively high
tonnes
China vs rest of world apparent market balanceRefined tin, ‘000 tonnes
-80
-60
-40
-20
0
20
40
60
802
00
0
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
ROW
China
balanceProduction minus consumption
2016 in review
Recent market trends
The outlook for supply and demand
Summary
Recent market trends
Data: Indonesian surveyor data (tonnage checked prior to export)
12-month rolling Indonesian refined tin exports
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000Ja
n-0
8
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Jul-
13
Jan
-14
Jul-
14
Jan
-15
Jul-
15
Jan
-16
Jul-
16
Jan
-17
Indonesian tin exports strong in Q1 2017 relative to Q1 2016
Refined tin, tonnes
Indonesian export price relationship
18,800
19,000
19,200
19,400
19,600
19,800
20,000
20,200
20,400
20,600
20,800
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Jan Feb Mar Apr Up to May 18th
2017ICDX trading volume LME3M Price
US$
/to
nn
e
Ref
ine
d t
in, '
00
0 t
on
ne
s
Myanmar Tin Production Areas
Source: ITRI, UNODCCP
Tin mine locations in Myanmar
0
10,000
20,000
30,000
40,000
50,000
60,000
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
f
Other areas
Wa county
Tonnes (tin content)
HeadlineWa county tin production
Processing facility and technology is improving, little ore is exported
Concentrate grades are 20%+
Ore stock in mining sites is decreasing
Local mining is more complicated and difficult, needs more investment
Ore and concentrate production is estimated to decline in 2017
Resource prospect is still unknown
Headline
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Myanmar Others
Concentrate and ore from Myanmar are declining
Tonnes (Gross weight)
China concentrate and ore imports
HeadlineChina will become a net exporter again?
-3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000Ja
n 1
0
Jul 1
0
Jan
11
Jul 1
1
Jan
12
Jul 1
2
Jan
13
Jul 1
3
Jan
14
Jul 1
4
Jan
15
Jul 1
5
Jan
16
Jul 1
6
Jan
17
Net Import Net Export
tonnes
China refined tin imports and exports
* Export tonnage is deduced
from other countries’ imports;
Export data incomplete in
recent months
• China cancelled export duty for refined tin from 2017
• Permission for concentrate processing trade is coming
HeadlineSHFE tin trading is more active19
Trading volume Daily open interest
Data: SHFE, Reuters
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2015 2016 Q12017
LMESHFE
0
3,000
6,000
9,000
12,000
15,000
18,000
2015 2016 Q12017
LME
SHFE
‘000 lots
Reported refined tin stock
0
10
20
30
40
50
60
70
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 19 May2017
Consumer
SHFE
LME
Producer*
’000t, refined tin
2016 in review
Recent market trends
The outlook for supply and demand
Summary
The outlook for supply and demand
Technology risks over time
-30,000 -20,000 -10,000 0 10,000 20,000 30,000
Solders
Tinplate
Tin chemicals
Energy materials
Short-term (1-5 years)
Medium-term (6-10 years)
Potential net changes in annual tin consumption by sector, tonnes
Refined tin use scenarios to 2030
150
200
250
300
350
400
450
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
IU -1%pa
IU -2%pa (Central Forecast)
IU -3%pa
Historical data
Annual consumption, ’000 tonnes
IU = Intensity of use
(Technological component of changing demand)
-20 -10 0 10 20
Myanmar
Indonesia
China
Peru
Australia
Other
Brazil
Russia
Africa
Bolivia
Existing mines
Projects
Changes in mine production to 2021
Potential changes in tin-in-concentrate production (2016 vs 2021), ‘000 tpy
Project development not a certainty
Supply deficit maintained
Global supply and demand balances in refined tin
‘000t
2013 2014 2015 2016 2017
World refind tin production 341.9 370.2 335.8 341.4 344.0
World refind tin consumption 349.0 357.8 345.7 352.7 355.1
Global market balance -7.1 12.4 -9.9 -11.3 -11.1
Reported stocks 34.3 39.1 32.2 28.7 23.0
World stock ratio 5.1 5.7 4.8 4.2 3.4
Base price (US $/t)
LME cash price - annual average 22,304 21,893 16,076 17,752 -
Data: ITRI, CRU
2016 in review
Recent market trends
The outlook for supply and demand
Summary
Summary
Headline
Pressure building in the tin market:
Sustained global supply deficit
Visible stocks near historic lows
Underlying decline in mine supply – rising costs – few alternative sources
But potential ‘pressure relief’:
Macro-risks to tin demand
Price responsive Indonesian tin output
Hard-to-predict Myanmar output
Chinese exports?
An imminent price explosion?
2017 Asia Tin Week
Expected 300+ delegates Half overseas delegates and half Chinese delegates
12-15, September, 2017Kunming, China
Highlights:
• CEO discussion
• Main tin production country reports - China, Indonesia, South America
• Application & technology outlook: Solder, Tin chemical, Advanced smelting technology
• YTC smelter visit
ITRI
Unit 3, Curo Park
Frogmore St.
Albans
Hertfordshire
AL2 2DDUnited Kingdom
+ 44 (0)1727 875544
www.itri.co.uk
ITRI China
Room 1606, C2 Tower,
Jinmao Building,
No. 18 Xizhimenwai
Street, Xicheng
District, Beijing,
China, 100044+86 10 6808 0915
k
www.itri.com.cn
We believe that global co-operation on markets,
technology, sustainability and regulatory issues is the
most cost effective route to achieve long-term success for
the industry. If we work together effectively then the
outlook for tin is very positive.
Global co-operation for long-term success
Thank You
