Tin market deficit as production drops 8%

Along with the rest of the base metals complex tin enjoyed a nice bump on Thursday on speculation that Chinese miners are getting serious about production cuts and Beijing may start stockpiling metals to make the most of low prices.

Tin gained nearly 2% to trade just under $15,000 on Thursday, recovering from a low of $14,200 a tonne hit earlier this week. The metal is still trading down more than 20% in 2015.

The market is set for a 6,000 tonne deficit in 2015, despite a decline in demand from top consumer China, the International Tin Research Institute announced today.

Platts News reports demand is expected to fall by 3% this year, and remain flat in 2016 at around 347,000 tonnes. The shortfall comes on the back of a steep in decline in primary production with world tin production likely to decline by around 8%. That will push the 2016 deficit to 10,000 tonne:

"The tin market has been in deficit for eight out of the last 10 years and it appears likely that structural deficits will continue in the near future," said Peter Kettle, ITRI's markets manager.

"Looking further ahead we see the possibility of a new growth spurt in tin use, most probably driven by existing and new applications linked to energy conservation and storage."