Peter Kettle of ITRI talks Tin
Wed, Sep 19, 2012
Tin Markets Surge to Six Month High
By Adam Currie — Exclusive to Tin Investing News
Tin prices have displayed a firming trend over the past four weeks, buoyed to a six-month high by news that shipments out of top exporter Indonesia fell 27 percent on the year.
The market’s bullish sentiment is very much the opposite of what analysts had forecast for the first quarter of this year.
In a note outlining the market, Smith had forecast an average price of $22,613 per tonne for this year.
Smith commented that part of the reason for tin’s resurgence over the past four weeks is that following a volatile period last year, the commodity’s fundamentals are finally looking sound. He stressed that inventories of the metal in London Metal Exchange(LME) warehouses had fallen dramatically, totalling 9,665 tonnes as of January 27, against a 52-week high of 23,425 tonnes.
A restructuring of the tin market in Indonesia has also contributed to movements over the past month.
In what many are calling an attempt to gain control over market prices, the Indonesia Commodity & Derivatives Exchange (ICDX) launched physical tin contracts to rival the 130 year old LME benchmark price. The Indonesia Tin Market (INATIN) officially opened its initial physical tin contract transaction on the ICDX on February 1.
Indonesia’s substantial tin reserves of approximately 800,000 tons – equivalent to approximately 15 percent of production at current rates – ensure that it will remain a key player in global tin prices.
In an interview with Reuters, Nick Trevethan, senior commodities strategist at ANZ in Singapore commented: “Tin buyers must be thinking about alternative suppliers rather than risk disruptions, if Indonesia’s smelters again try to force prices higher.”
Analysts suggested that the best-placed alternative suppliers are Peru, Brazil, and Bolivia, where largely untapped reserves range from 400,000 tonnes to 710,000 tonnes, according to US Geological Survey data.
Ideology shifts affected Bolivian markets in January, with President Evo Morales seeking to lure foreign investment back into mining, which had stalled after he nationalized the gas industry. Last month Morales appointed Mario Virreira, who once worked at the Vinto tin smelter, as the country’s Minister of Mines. According to ITRI, tin is currently Bolivia’s third most lucrative mining export, with metal and concentrate sales accounting for up to 15 percent of total foreign earnings.
Prices dipped briefly in February on the back of an announcement by the Indonesian energy ministry that the country will ban exports of some unprocessed metals from 2014, and could revoke export licences of firms that violate the ban. According to Reuters, minerals covered by the ban include copper, gold, silver, nickel, tin, bauxite, and zinc.
The ministry argued that the regulation would improve domestic metal production capacity, boost supplies of refined products, and increase government revenue. The Indonesian Mining Association responded by urging the government to delay the regulation’s implementation.
Bob Kamandanu, the association’s treasurer, claimed that the current regulation was acceptable, telling Reuters: “Minerals like gold and tin need to be processed anyway so the mining companies do not have to make a big overhaul to meet the regulations.”
Tantalum Q4 Outlook
Wed, Sep 7, 2011
By Michelle Smith–Exclusive to Tantalum Investing News
Tantalum demand has been growing and prices have been rising since 2009. The question that investors may be asking at this point is what will happen to tantalum in Q4.
Since pricing for tantalum is a different ballgame than pricing for other metals, investors do not have the luxury of accessing current and exact figures as they with those other metals. At best, what is usually made available is a fairly recent price range that has been determined by gathering information from those who are willing to provide it. Therefore, reliance on forecasted figures is even more risky than it normally would be.
Another issue with forecasting prices is that tantalum transactions are often subject to off-take agreements. These arrangements can lock in different prices for different consumers and limit volatility. Therefore, with tantalum, it is best to base an outlook on an overall assessment of the market and the factors at play.
Supply and demand
It was predicted that the tantalum market would experience a deficit this year. Reports of a strained market carried over from 2010 and the condition is believed to have gotten progressively worse. If there is not technically a tantalum deficit at this moment, it is likely to be seen in the forth quarter.
One reason that this deficit appears imminent is that there simply is not an adequate supply of raw tantalum at this point to meet the growing demand. It is predicted that demand will continue growing at about 9-10 percent annually.
A second reason is that there are likely to be numerous consumers who need supplies and this need may be largely concentrated over the next few months. Some consumers, such as those in the capacitor industry, have shown resistance to miners attempts to nudge them toward long term contracts and elevated prices. However, digging one’s heels in the ground is an easier feat when there are supplies currently available to proceed with operations. It is believed, however, that consumers’ stockpiles have now dwindled, which will leave them with little choice but to make purchases on some terms.
What could help to alleviate the pressure are new sources of supplies. But, there is virtually no suggestion of enough new production this year to majorly impact the current market environment.
Earlier this year, Cabot Corporation (NYSE:CBT) noted that they were expecting to restart production from the TANCO mine this year. If those expectations are to be met, that production will need to be forthcoming in Q4. The impact that these supplies may have on the current market strain cannot be determined since the company has not supplied production targets.
Global economic climate
Investors should stay abreast of the global economic climate and retail activity in Q4. With major financial problems looming in Europe and a struggling US economy, consumer confidence has notably been falling, which could eventually being to take a toll on electronic sales in those nations. At the same time, it is important to remember to balance consideration of developed economies with that of emerging economies, where many companies are reporting that there are eager consumers and strong retail activity.
The bottom line is tantalum supplies are currently tight in a market that has been experiencing constant growth and which is expected to continue growing. There are those who predict that prices will continue to rise and there are others who foresee prices stabilizing. In any case, there are not currently any predictions that tantalum prices will fall in the fourth quarter or that demand will subside.
Disclosure: I, Michelle Smith, hold no direct investment interest in any company mentioned in this article.
Bear Market in Tin Ending as Shortages Mean PT Timah’s Profit Advances 55%
By Glenys Sim and Yoga Rusmana - Jul 5, 2011 5:20 AM MT
Erfandi’s fleet of bamboo rafts are dredging 33 percent less tin ore from the rivers of Indonesia’s Bangka Island than in 2008, as miners fail to keep pace with consumption that jumped 14 percent in two years.
The vessels operating in the world’s largest exporting nation are hauling up no more than 40 kilograms (88 pounds) of ore daily, from 60 kilograms, as reserves get depleted, said the 46-year-old foreman. Miners from China to Peru are also struggling to meet demand for the metal, used to solder components in almost all electronic equipment.
While commodity investors suffered their worst quarter in a year as wheat, cotton and crude retreated, prices will rebound because of shortages, a Bloomberg survey of analysts in June showed. Tin fell 22 percent from a record in April, entering a so-called bear market, and will rally 15 percent to $30,000 a metric ton by Dec. 31, a Bloomberg survey of 15 traders, analysts and smelters showed. The market will be in deficit for the fourth time in five years, Barclays Capital says.
“It’s a market where there’s not enough of the metal coming out of mines around the world,” said Nic Brown, the head of commodities research at Natixis Commodity Markets Ltd. in London who predicted higher prices last July, nine months before they reached a record. “If you remain positive on the basic growth story out of China, and the other developing countries, the fundamentals in the tin market have not changed that much.”
Prices climbed 51 percent to $26,185 in the past 12 months on the London Metal Exchange. PT Timah, based in Pangkalpinang, Indonesia, will post a 55 percent profit gain this year, analysts’ estimates compiled by Bloomberg show. Dole Food Co., the world’s biggest fresh fruit and vegetable producer, said in May that it’s paying more for tinplate. The packaging material is made from sheets of iron or steel coated with tin.
Solder represents 52 percent of demand and tinplate 17 percent, according to ITRI Ltd., a St. Albans, England-based researcher. The metal is used in electronic goods and a high proportion of electrical appliances, ITRI said.
Tinplate prices rose as much as 15 percent to 20 percent in some countries in the past year, according to H.J. Heinz Co., which sells 1.5 million cans of baked beans every day in the U.K. alone. Each 415-gram (0.9 pound) container uses a third of a gram of tin, the Pittsburgh-based company said in an e-mail.
Global sales of electronic equipment rose 17 percent to $1.85 trillion in 2010 and may gain another 6 percent this year, according to Bannockburn, Illinois-based IPC, an association for suppliers to the industry.
“As long as there’s a circuit board, there will be tin,” said Wu Xiaofeng, an analyst at Shanghai Metals Market, which has more than 400 researchers.
Tin is more than 31 times rarer than copper in the earth’s crust and the two metals were combined to make bronze as long as 5,500 years ago, according to the U.S. Geological Survey. This year, global demand may rise 0.5 percent to an all-time high of 366,000 tons, exceeding supply by 6,000 tons, Barclays Capital estimates. Based on last year’s average price, that would value consumption at almost $7.5 billion.
The metal advanced 170 percent since reaching a two-year low in December 2008 as demand rebounded from the worst global recession since World War II and floods cut Indonesian output. That outpaced the 157 percent gain in the London Metal Exchange Index of six metals and the 52 percent jump in the MSCI All- Country World Index of equities. Treasuries returned 4.1 percent, a Bank of America Merrill Lynch index shows.
The Standard & Poor’s GSCI gauge of 24 commodities fell 7.8 percent last quarter as wheat dropped 20 percent, cotton slumped 41 percent and oil retreated 11 percent. The index pared losses in the final three days, advancing 4 percent.
Sales of electronic goods and tin prices could slump should economies weaken. U.S. consumer confidence dropped to a seven- month low last month, the New York-based Conference Board’s sentiment index showed. Federal Reserve Chairman Ben S. Bernanke said June 22 that part of the slowdown in the world’s biggest economy may be “longer lasting.”
More than two-dozen countries raised interest rates this year to cool inflation. China, the world’s biggest tin consumer, increased rates four times since October to contain prices that gained 5.5 percent in May from a year earlier, the fastest pace since 2008. Japan entered its third recession in a decade in the first quarter.
“The global macroeconomic environment is the greatest risk the market faces,” said Liang Haisan, a Shanghai-based analyst at Citic Newedge Futures Co., a venture between Citic Group, China’s biggest state-owned investment company, and Newedge Group. “China won’t be spared from a global slowdown.”
Another economic slump would slash demand for tin, driving prices as low as $22,000 by the end of the year, according to the median estimate of 11 people in Bloomberg’s survey. That would still be 87 percent higher than the average over the last decade, data from the London Metal Exchange show.
Inventories monitored by the LME suggest there is no supply crunch yet, after gaining 36 percent to 22,180 tons this year. There are also signs that trend may reverse. Orders to remove metal from warehouses, known as canceled warrants, rose fivefold on June 28 to the highest level since April 2010, LME data show.
Increasing inventory is no bar to rising prices. Warehouse stockpiles had jumped 15 percent this year when the metal traded at the all-time high of $33,600 on April 11.
Part of the increase in inventories may have been caused by LME prices trading at a premium to those in China, spurring exports, according to CRU, a research company based in London. That premium no longer exists, CRU says. LME tin for immediate delivery averaged $1,579 a ton more than Chinese prices from October through mid-April, according to Bloomberg calculations.
Demand is poised to rise because the world economy is still expanding. U.S. growth will accelerate to 3.2 percent this quarter, from 2.3 percent in the prior three months, the median of 68 economists’ estimates compiled by Bloomberg show. The world economy will expand 4.3 percent this year and 4.5 percent in 2012, the International Monetary Fund said June 17.
Demand for electronic goods is accelerating. Global sales of mobile-phone handsets will rise about 12 percent to about 1.8 billion units this year, Gartner Inc., a Stamford, Connecticut- based researcher, said in a May report. Shipments of tablet computers will advance 12-fold from 2010 to 2015, IHS iSuppli, an El Segundo, California-based researcher, said in February.
Chinese requirements may rise 6.8 percent to 157,000 tons this year, compared with domestic supply of 155,000 tons, according to Ran Jun, a senior analyst at Antaike Information Development Co., a state-backed research group.
Shipments from Indonesia were worth $1.71 billion last year, from $1.25 billion in 2009, according to the trade ministry. In Bangka Belitung Province, the industry has created about 300,000 jobs, said Johan Murod, a director at PT Bangka Belitung Timah Sejahtera, a group of six smelters.
The market is “critically dependent” on exports from Indonesia, Peru and Bolivia, said Edward Meir, a senior analyst at MF Global Holdings Ltd. in Darien, Connecticut. Output from the two South American nations may drop to a combined 48,000 tons this year from 51,100 in 2010, CRU estimates. Indonesian supply may increase “slightly,” ITRI forecasts.
The average metal content of ore is declining because richer deposits are now exhausted, Mohd. Ajib Anuar, group chief executive officer of Malaysia Smelting Corp., the country’s biggest producer, said in an interview in January. Mining companies are removing twice as much waste as they did two decades ago to get to the ore, he said.
PT Timah will report net income of 1.47 trillion rupiah ($172 million) this year, compared with 948 billion rupiah in 2010, the mean of 10 analyst estimates shows. The shares have climbed 23 percent in the past year in Jakarta.
A rally would also help the miners of Bangka Island, including Erfandi, who used just one name, and Andri Salim. He used to dig up ore from his backyard and now supervises 10 workers trawling for the metal offshore.
“People are buying new cars, motorcycles and sending their children to good schools all because of tin,” the 47-year-old Salim said. “We can see tall buildings, hotels, three shopping malls and lots of stores.”
Story originally sourced from:
Rare Earth Metal ~ News of Tantalum Mining To Be Funded by Equity Japan.
By Anthony Williams
As a Rare Earth Metal, Tantalum, which is used for the manufacturing of hi-tech electronic capacitors, is currently experiencing a global demand surge as lack of the “rare earth” ore continues.
Metal mining of these Rare Earth commodities has rarely experienced such fluctuations in its market value, having been affected with a series of market, competitive, governmental, environmental and humanitarian factors, all providing an influence at one stage along the economic time line of the supply and demand of Tantalum.
Tantalum, presently in 2011, and over a decade since the rare earth metal hit a historically high market price, is again becoming a precious commodity that the developing world is consuming at a much faster rate than the rate at which it can be mined. With global stockpiles diminishing daily, a market opportunity has opened that will provide thriving returns for the opportunists who can take advantage of the expanding gap in the supply and demand for mining Tantalum ore, the base for Coltan .
Equity Japan and IMC Projects, the Malaysian based mining company, are positioned to take this early advantage after announcing their investment project.
IMC Projects, who begin their three year mining operation with immediate effect for Tantalum ore. The eventual commodity markets to benefit, from what is estimated to account for approximately 10% of global supply over the course of the next three years, are likely to be the Asian technology manufacturing nations such as Taiwan and mainland China.
This Tantalum mining project could not be better positioned geographically. Delivering resources to the manufacturing companies with speed and efficiency will provide a boost to the industry and will go a long way to relieving the pressure being placed on the hi-tech consumption markets of India and China.
Rare Earth commodity analysts are forecasting the price of Tantalum to continue rising during 2011, and although it is unlikely that prices will hit the inflated prices as seen at the turn of the millennium, is it highly expected that prices will push towards the $150lb mark and will at least maintain that level for the foreseeable future.
iPhone and iPad, Apple Inc’s flagship products, use tantalum as the source of their powerful innovation. As middle classes in the massive developing nations continue to grow at reported pace, so too will the desire of the people to own such gadgets for both business and leisure needs, all dependent on the resulting product “Coltan”.
Page 1 of 3