The fate of the tin market remains in the hands of Myanmar's United Wa State Army, which controls one of the world's largest mines, according to news on January 10.
Wa State, Myanmar's largest ethnic minority, ordered a moratorium on all mining and processing operations in the autonomous region in early August to allow for an extensive audit.
The ban has been lifted since January 4 and applies to most mining industries. A major exception is the Man Maw mine, which accounts for almost all of the region's tin production. The region is the world's third-largest tin producer and a major supplier of Chinese smelters.
So far, the impact of the suspension has been modest. This is a good sign that has enabled Chinese companies to hoard iron ore and metals, and the reduction coincides with a downturn in global demand.
The London Metal Exchange (LME) three-month tin price remains locked at 2 per tonne3 - 2.$50,000 range, the latest price is $24,220.
However, with demand in the vital welding industry showing signs of recovery, the market needs Wanmao to resume operations as soon as possible.
Progress has been slow
The International Tin Association (ITA) has been monitoring the development of this opaque part of the global ** chain, and according to the association, the Wa leadership has allowed operators in Manmau to process surface tin ore since September last year.
The Wa State Mineral Industry Authority held a meeting with the operator in Manmao on December 4 and finally submitted a mine management proposal to the Wa State ** Committee (EPC) for further review.
The new rules reiterate that all mining rights are owned by the EPC and require investors to apply for a three-year exploration licence before applying for a full-fledged mining licence.
According to the ITA, the EPC's decision on Manmmore Island is pending. The association noted that it was "optimistic**" that full mining would be allowed after the Chinese New Year, but said it could take time to remobilize the workforce after a six-month moratorium.
During this time, it was reported that ground stocks "are now mostly depleted," ITA said.
China turned to metal imports
China's tin ore imports from Myanmar slowed markedly after a pause in August.
Raw material flows from Chinese mainland fell in September last year and then picked up again in October and November, likely reflecting China's resumption of processing of above-ground stocks.
Total imports in the period from September to November were 320,000 tons, compared to 6 in the first three months50,000 tonnes, at a time when operators were busy rushing to meet the August 1 deadline.
Chinese smelters have turned to other companies such as Bolivia. In the first 11 months of 2023, imports of iron ore and concentrate from South American countries almost tripled to 8,550 tonnes, compared to 2,900 tonnes in the same period last year.
To date, China's refined tin production has remained good. According to local data provider Shanghai Metal Market, production in December was up 45%, while full-year production was 168,938 tonnes, 18%。
However, it is worth noting that China's refined metal inventories have been declining, while imports have been rising, suggesting a mismatch between domestic production and demand.
Inventories registered on the Shanghai ** Exchange have fallen to 6,402 tonnes from a high of 9,673 tonnes in May 2023.
Imports totalled 5,350 tonnes in November, the highest monthly volume since May 2022, and cumulative imports totalled 28,500 tonnes, up 27%, when refined tin imports reached their highest level since 2012.
Demand recovery
In recent months, the Western market** has been plentiful enough to afford to lose these units to China.
LME tin inventories more than doubled to 7,700 tonnes last year, with physical premiums slipping.
Demand has been particularly weak in the electronics industry, which accounts for about half of all tin demand in the form of circuit board solder.
According to the latest statistics from the industry body World Semiconductors, semiconductor sales may decline by 9 percent in 20234%, semiconductors are an effective representative of tin solder demand.
However, it expects a "strong recovery" in 2024, with annual growth expected to reach 13., led by the Americas and Asia-Pacific1%。
The extent to which the tin market can cope with this demand** will largely depend on how long it will take for the Wa leadership to approve the full return of the Manchu tin mines.