Tin Prices Spike on Indonesian Supply Bottleneck

Michael Teague |

Tin contracts slated for delivery in three months’ time rose over 5 percent to $24,000 per metric ton on the London Metal Exchange on Friday, continuing a climb that began with the implementation of an August 30 rule in Indonesia, the world’s largest producer of the metal.

It has been just over a month since the Indonesian government passed a law that requires all refined tin to be traded on a local exchange before it can be eligible for export. Indonesia accounts for about 40 percent of the global tin supply, and there is currently only one exchange in the country to handle contracts.

Friday’s activity sent the metal to a six-month high on the LME, as Barclays PLC (BCS) estimated that demand for tin will exceed supply by some 3,000 metric tons come 2014, and analysts are seeing no price-relief in the near future.

William Adams with London’s Fastmarkets.com stated in an interview that “fundamentals are tight with the shipments from Indonesia being restricted,” and that the situation was likely “to play out for a bit longer.”

Indonesia is Southeast Asia’s largest economy, one of the most promising of the emerging markets, as well as one of the world’s largest democracies. Recently-imposed regulatory measures on tin are expected to cause a supply-jam resulting from slower export rates and could also affect smartphone manufacturers and other companies and industries that use the metal.

The jump for tin, amounting to a nearly 2 percent gain on the week, also substantially lifted prices for copper and nickel.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AMDHF Atcor Medical Hldgs Ltd 0.11 0.00 0.00 0
BCS Barclays PLC 8.83 -0.20 -2.21 4,993,335

Comments

Emerging Growth

New Age Farm Inc.

New Age Farm Inc is engaged in the development of the agriculture based business in Langley, British Columbia.

Private Markets

MyForce, Inc.

As parents, we constantly worry about the safety of our loved ones. The media bombards us with incidents from across the nation school shootings, frequent assaults on campuses, and crimes…

Knightscope

Autonomous security robots providing advanced detection capabilities at $7 per hour - aiming to define the future of security. Help #StopTheViolence.