As a result of reports that Myanmar, the third-largest producer of the soldering metal in the world, may suspend production, tin prices shot up on Monday, creating an opportunity for increased Nigerian tin supply.
The price of three-month tin on the London Metal Exchange increased by 11% to a two-month high of $27,705 a tonne and was last trading at $27,180. The Shanghai Futures Exchange (ShFE), which was already experiencing record levels of trading activity before to the most recent unrest, served as its model.
The unexpected danger to supply comes in the shape of a declaration from the Wa State, the most powerful ethnic armed group in Myanmar, which governs the tin mining region on the border with China.
According to a document seen by Reuters, all mining and processing operations will be “suspended” beginning in August in order to protect the residual resource.
Tin is such a significant source of income for the self-declared Wa State that it seems like a weird move, but there might be more to the declaration than meets the eye.
However, it serves to underscore the significance of one of Southeast Asia’s most remote regions to the world’s tin supply chain.
China’s tin smelters are particularly vulnerable, despite their efforts to reduce their reliance on ore from Myanmar.
23,500 tonnes from the Democratic Republic of the Congo, 11,500 tonnes from Australia, 3,000 tonnes from Nigeria, as well as lesser quantities from Laos, Vietnam, Thailand, Malaysia, and Russia, were imported last year.
It’s unlikely that the supply from alternative sources could be increased quickly enough or on a large enough scale to make up for the temporary loss of material from Myanmar.
