Market Briefing - July 21, 2008

Following the correction from the all-time high of over $25,000/tonne seen in May, tin has stabilised at around $23,000/tonne in mid-July. The June monthly average at $22,229/tonne came in 7.6% lower from the previous month – the first decline since December 2007. Meanwhile, LME inventories continue their downward trend, currently around 5,700 tonnes on July 21, down around 45% over the y-t-d.

Chinese refined output decreases…
In our last Base Metals Market Briefing Update, we included initial statistics from the NBS. However, the official figures from the CNI-A have now been released. According to the organisation, refined tin production in May totalled only 10,238 tonnes, 19% down y-o-y. Cumulative output was also lower, but by 15.4% at 51,342 tonnes. Production levels have recently come under further pressure from raw material shortages.

…while mine output increases
Chinese production of tin-in-concentrate, however, displayed a rise in May, coming in at 5,789 tonnes, up by 3.2% y-o-y. Having said that, cumulative output at 23,815 tonnes was 3% lower. It should be noted that the CNI-A data significantly understates the level of mine output due to the myriad of small-scale producers, which are not included. However, the CNI-A data does reinforce the tight concentrate position.

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