Orders to remove tin from warehouses monitored by the London Metal Exchange equal 61 percent of stockpiles, the most of all the main industrial metals as imports doubled in China, the world’s largest user.
Canceled warrants, as the orders are known, equal 7,095 metric tons after climbing to the highest level since at least 1997 yesterday, according to LME data. The share of stockpiles earmarked for delivery jumped to 68 percent yesterday, the most on record. The ratio compares with 36 percent for lead, 33 percent for aluminum, 18 percent for copper, 14 percent for zinc and 12 percent for nickel.
China’s tin imports doubled in two months through to July to 3,125 tons, customs data show. Prices fell 20 percent from this year’s high in February on concern that slowdown in the U.S., China and Europe will curb demand for the metal used in cans, televisions and smart phones. China’s mine output will fall 7.2 percent this year, industry group ITRI Ltd. said.
“China’s demand for imports appears to have been rising,” David Wilson, an analyst at Citigroup Inc. in London, said by e-mail. “If Chinese production is struggling under lower prices, that tightens the market outside China as Chinese consumers look more and more to import metal.”
Tin for immediate delivery was $20 a ton more than the three-month contract in London. The so-called backwardation may signal limited nearby supply. Tin for delivery in three months on the LME climbed as much as 2.5 percent to $21,200 a ton, the highest since May 9, and is up 5.5 percent in the past week.
Users in China can import tin at a lower price than buying it domestically, Citigroup estimates. The metal traded on Shanghai’s market in Changjiang closed at 153,000 yuan ($24,183) a ton today, data compiled by Bloomberg show. The price includes an import duty and value-added tax.
Exports of the metal from Indonesia, the world’s biggest shipper, fell 32 percent in August to a seven-month low after producers including PT Timah halted output because of falling prices. PT Timah, the third-largest tin producer, restarted sales from Indonesia in August after prices surged.
About 92 percent of tin stockpiles are in Johor, Malaysia. Global inventories were unchanged at 11,665 tons as 815 tons of metal that had been earmarked for delivery were put back on warrant, LME data showed today. Stockpiles fell 0.4 percent since the end of July at the same time the orders doubled.
“I don’t think we will see thousands of tons of tin moving out of the warehouses any time soon,” Peter Kettle, research manager at ITRI, said by e-mail. The rise in the canceled warrants may be because the metal is being reserved for shipment to China or Europe or some buyers are trying to beat long waiting lines at Johor, he said.
Demand for tin from the electronics industry is weak, Wilson said. Electronics account for more than 50 percent of demand, according to ITRI, whose members account for about two of every three tons of global production.
China’s tin consumption will drop 3.8 percent to 147,900 tons this year, ITRI and researcher CRU International Ltd. say. Its mine production will fall to 94,600 tons, ITRI says. Demand will exceed supply by 2,000 tons, a third consecutive shortage, Standard Bank Plc estimates.