We have held our Q2 tin price forecast unchanged at $21,000 per tonne for some time, even as prices threatened $22,000 per tonne in April. We have been confident that the supply-side fundamentals will weaken and this now seems to be happening.
In turn, and as daily prices have broken below the $21,000 per tonne level, the average price for the quarter is moving towards our forecast. Driving prices lower has been a surge in exchange stocks, which jumped 3,233 tonnes, or 50% over the first half of Q2 alone.
The Indonesian supply bottleneck has passed now that the government has cleared rules on export permit applications and issued permits to 12 companies to ship a total of 51,368 tonnes this year. Chinese exports are also surging; they reached 1,960 tonnes in Q1, compared with 110 tonnes in the same period of 2017. In light of this, tin prices and premiums are likely to remain under downward pressure in the short term.
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