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Commodities

Prices hit four-month high on lower Indonesian exports

TOKYO -- Tin prices are rapidly rebounding and recently hit a four-month high due to a decline in export volume from Indonesia, a leading producer.

     March futures on the London Metal Exchange were trading around $16,000 a ton on Thursday, more than 20% higher than the mid-January low, after touching a four-month high of $16,200 a ton on Tuesday.

     Indonesia exported 2,500 tons of the non-ferrous metal in January, 60% less than in January 2015. The drop was attributed to the season's monsoon causing more substantial damage than in a typical year on Bangka Island, home to many tin mines.

     In addition, the market has been gripped with supply uncertainty because midsize Indonesian refiners have begun suspending operations due to recent prices on the global market and the country's environmental regulations. As a result, LME tin inventories have fallen 60% in the past year to 3,850 tons.

     Demand for the metal, which is used in solder for consumer electronics, remains sluggish in China, the world's largest consumer. However, Chinese tin producers are also reducing output and 2016 production is projected to be down 12% from 2015, so international markets are likely to be bullish for the time being.

(Nikkei)

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