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Andy Home: Myanmar mine still a major player in the tin market

As the market waits for the Man Maw Mine to return in Myanmar, tin continues to outperform other base metals on the London Metal Exchange.

Two years have passed since the mine was shut down for a resource assessment. Six months have passed since the authorities of the semi-autonomous Wa State invited new applications for mining permits.

There is still no sign of a significant increase in activity. The flow of tin concentrats from Myanmar into neighbouring China is almost completely dry.

The uncertainty surrounding Man Maw has reignited fund interest in buying tin, and the LME 3-month tin prices have risen from less than $30,000 per metric tonne in April to over $35,000 by the end of August.

The tin supply is still a mystery to many speculators.

WAITING FOR MAN MAW

China's decreased imports of tin from Myanmar is a clear indication of the continued absence of Man Maw supplies.

The flow of raw materials to Chinese smelters fell to 933 tons in the month of July. This suggests that activity has not yet resumed at Man Maw, and that other smaller mines in the country are also experiencing disruptions, perhaps due to the March earthquake that shook the country.

Imports from Myanmar in the first half of this year have dropped by 77% compared to last year, and now total just 14,200 tonnes. Comparatively, the monthly average imports in 2022 and 2023 were 15,000 tons, when Man Maw still produced tin.

The International Tin Association announced in July that the first permits for the mining of Man Maw had been issued.

The Association warned it would be some time before actual tin production resumed and exports recovered.

It has been proven.

No Scratch

China's tin-smelters have been able to compensate for the loss Man Maw, which was their primary source of supply until August 2023 when it was suspended.

This year, the Democratic Republic of Congo emerged as the single largest supplier of tin concentrats. Imports from Australia and Nigeria also increased sharply.

The total imports through July of 73,000 tonnes are down 32% on an annual basis.

According to Shanghai Metal Market, the margins of Chinese smelters have been squeezed. Capacity utilisation in many areas of China was less than 70% last month.

Many operators carry less than 30 day's worth of concentrates and take maintenance time in the hopes that raw material availability will improve when they return.

Yunnan Tin is the largest producer of refined Tin in the world. It has shut down its Gejiu Smelter for 45 Days for its annual maintenance.

The loss of Man Maw, however, has not yet caused any visible tightness in refined metals segment of the supply chains.

The global exchange inventory is stable at over 11,000 tons for the past three months. This is a far cry compared to the days of true scarcity, in 2021, when stocks were down to 1,000 tons.

Exports from Indonesia are recovering from the disruption caused by last year's permits. Exports of 30,000 tonnes to July 2024 were 64% higher than the same period in 2014.

The escalation of trade tensions between China and the United States has also likely helped. Tin is used in the electronics industry to solder circuit boards.

BULLS RETURN

Tin bulls remain unabated. Funds increased their bets for higher prices up to 4,515 LME (22,575 tonnes), while short positions were reduced to only 610 contracts.

The net positioning has remained the same since March when the price spiked up to a three year high of $38,395 a ton following news that the M23 insurgents had briefly taken control of the Bisie Tin Mine in the Congo.

Bisie quickly returned to normal operations following the M23 withdrawal as part of the U.S.-brokered Peace Deal between Congo and Rwanda.

Man Maw remains, however, conspicuous in its absence. Funds appear to be betting on the fact that production will not return to levels seen before closure.

It's impossible to know if that assumption is correct, due to the near complete lack of information coming out of Wa State.

When the raw material flow over the border into China begins to return to historic norms, the answer will be apparent.

These are the opinions of the columnist, an author for.

(source: Reuters)