Tin jumped the most in nine months after a key mining region in Myanmar, the world’s third-biggest supplier, moved to curtail digging of the material used in electronics and cans.
(Bloomberg) — Tin jumped the most in nine months after a key mining region in Myanmar, the world’s third-biggest supplier, moved to curtail digging of the material used in electronics and cans.
An economic planning committee in a northern area of the country controlled by the United Wa State Army — Myanmar’s largest ethnic armed organization — ordered a general halt to mining operations, according to an International Tin Association note to its clients seen by Bloomberg News. The ITA cited an April 15 notice from the committee, which also said producers with valid contracts can continue until Aug. 1.
There was a lack of clarity among analysts over what exactly the apparent crackdown means for mining activity. But the region has become a key source of tin ore in recent years — especially for refineries in China — and any disruptions will ripple across the global market.
“Supply has generally been recovering pretty well, so a shock to the system like this is not what is needed,” Pearce said. “There’s a fair bit of buffer stock in China at the moment, but it does mean that they’ll probably be looking for additional ore or refined tin in the international market.”
The Wa self-ruled areas in Shan state, one of which borders China, accounted for 30% of China’s total supply of tin ore, the ITA said last year. Authorities there said their recent action was aimed at preserving the region’s mineral resources, according to the ITA’s note.
“It’s still uncertain whether this will lead to a real cut in production, or how much capacity will be affected,” Guotai Junan Futures Co. said in a note. “A full halt could cause a significant impact on China’s or even the world’s supply set-up.” The firm expects prices to perform strongly on shrinking supply, even if demand remains muted.
Tin climbed as much as 11.5% in London to reach $27,705 a ton, the highest since February, before trading at $27,445 a ton as of 4:18 p.m. local time.
–With assistance from Andrew Janes, Mark Burton and Yvonne Yue Li.
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