The ICDX tin price at the beginning of this year was observed to be still in a bullish trend with the average price movement remaining above $40,000 per MT. The tight supply in the global market is the main catalyst that drives the price of this basic metal commodity. Indonesia's tin exporters until the 2nd week of January are still waiting for the release of export approvals (PE) for 2022, thus making transactions vacuum since the beginning of this year.
The limited supply condition was also seen in the Kuala Lumpur Tin Market (KLTM) physical market, which showed an average transaction volume of 5 lots (25 MT) per day, much lower than the transaction volume before the Covid-19 pandemic hit the world's third-largest tin producer, which the average transaction is above 10 lots (50 MT) per day.
Meanwhile, China, which relies on Myanmar for raw material supplies of tin, has experienced a decline following the closure of customs in Myanmar due to the outbreak of the Covid-19 pandemic. In addition, ahead of the Lunar New Year holiday celebrations in China in February, most smelters in the world's largest tin producer and consumer country close early, which has the potential to further reduce tin supply in the global market. Quoted from the Shanghai Metals Market (SMM), it is estimated that China's tin production in January will reach 12.485 MT, or 11% lower than December's production.
Starting 2022, China government released a number of policies and supporting regulations for the electric vehicle (EV) industry. Some of the measures taken include reducing subsidies for EV purchases and lifting the cap on foreign automakers' shares in local joint ventures. Meanwhile, the regulations issued include battery waste treatment, standardization of autonomous driving, standard safety features, and also consumer protection. The clearer government regulations will encourage the growth of the EV industry in a country that controls about 40% of the global EV market share. Of course, this will also be good news for tin commodities, which are widely used in EV manufacturing, from batteries to car glass.
Japan - Core Machinery Orders (Nov)
China - Gross Domestic Product (Q4)
China - Industrial Production (Dec)
Japan - Tertiary Industry Activity (Nov)
Japan - Revised Industrial Production (Nov)
USA - Empire State Manufacturing Index (Jan)
USA - Philly Fed Manufacturing Index (Jan)
Japan - National Core CPI (Jan)
Source: ICDX Research