Four producers that supplied most of the world's tin exports last year have suspended some or all production until at least Tuesday March 31, in an effort to curb the spread of Covid-19.
In Malaysia, where the government lockdown was just extended to April 14, Malaysia Smelting Corp (MSC) is the latest, confirming to Fastmarkets that its tin production has been suspended.
Production at Peru’s Minsur and exports from Bolivia’s EM Vinto also were halted, according to sources and company announcements, while the world’s top producer, Indonesia’s PT Timah, reportedly said it would cut production by up to 30% and delay exports.
The four companies are among the world’s top six producers, according to the International Tin Association, and have been shut for between two and in some cases four weeks. More significantly, they dominate global tin exports, sources said, since the other two of the top six producers are in China, which largely consumes the tin it produces.
An MSC company spokesperson confirmed to Fastmarkets on Wednesday March 25 that “due to the Covid-19 outbreak, the Malaysian government has implemented a Movement Control Order and this has temporarily halted Malaysia’s Smelting’s tin smelting and tin mining operations.”
Together, the four firms on total or partial hiatus produced 39.4% of the world’s 334,400 tonnes of refined tin last year, according to the International Tin Association (ITA). The ITA ranked PT Timah top global producer, with 76,400 tonnes; MSC ranked third with 24,300 tonnes; Minsur fourth, with 19,600 tonnes; and EM Vinto sixth, with 11,500 tonnes.
Tin prices on the London Metal Exchange remain low, even among generally depressed base metals, but tin premiums in the United States - which gets much of its supply from Minsur and MSC - rose this week and there were substantial movements of tin out of LME warehouses in the US.
On Thursday March 26 - the day the ITA issued an email about some of the tin production curtailments - 730 tonnes of tin were canceled from the LME warehouse in Los Angeles.
Some buyers said they could not obtain tin from their usual suppliers this week and paid up to $75 more per tonne in premiums for delivered tin, which is also facing upward pressure from trucking shortages.
Fastmarkets’ price assessment for tin grade A min 99.85% ingot premium, ddp Midwest US, was $500-675 per tonne on Tuesday March 24, up from $455-600 per tonne on March 10.
The official three-month tin price on the London Metal Exchange closed at $14,090 on March 26, up 3% from $13,680 per tonne the day prior..
One US seller attributed tin’s price rise more to growing consensus about government aid packages for reeling economies, including a $2-trillion stimulus package agreed in the US.
“I think the markets are trading more now on fear and unrest than fundamentals,” he said, but agreed with almost all US tin market participants that material is getting tighter and premiums are likely to rise.
The US produces no tin and has a total of 630 tonnes available on warrant in US LME warehouses. The US consumes nearly 30,000 tonnes of tin per year, according to one industry veteran.
Several sources said that PT Timah, in addition to cutting production, has now stopped supplying tin to the spot market and will only honor contracted supply. The sources said they had been notified of that change by letter.
PT Timah, which has become a more significant participant in the US market lately, did not respond to Fastmarkets' request for comment.
Minsur issued a press release saying it had complied with a March 17 government directive that remains in effect until March 31, and suspended tin smelting starting March 18.
Bolivia closed its borders from March 18 to March 31.
“If you didn’t have tin at the port by then it wasn’t getting out,” one US source said, adding that he was raising his offers by $100 per tonne for tin in warehouse. “If I think the premium will be more in two to six weeks, why would I offer it for less now?”
Editor's note: This story was updated on Friday March 27 with global tin production figures and timelines for closures.