Bear Market in Tin Ending as Shortages Mean PT Timah’s Profit Advances 55% (update1) - Bloomberg

Erfandi’s fleet of bamboo rafts are dredging 33 percent less tin ore from the rivers of Indonesia’s Bangka Island than in 2008, as miners fail to keep pace with consumption that jumped 14 percent in two years.

The vessels operating in the world’s largest exporting nation are hauling up no more than 40 kilograms (88 pounds) of ore daily, from 60 kilograms, as reserves get depleted, said the 46-year-old foreman. Miners from China to Peru are also struggling to meet demand for the metal, used to solder components in almost all electronic equipment.

While commodity investors suffered their worst quarter in a year as wheat, cotton and crude retreated, prices will rebound because of shortages, a Bloomberg survey of analysts in June showed. Tin fell 22 percent from a record in April, entering a so-called bear market, and will rally 15 percent to $30,000 a metric ton by Dec. 31, a Bloomberg survey of 15 traders, analysts and smelters showed. The market will be in deficit for the fourth time in five years, Barclays Capital says.

“It’s a market where there’s not enough of the metal coming out of mines around the world,” said Nic Brown, the head of commodities research at Natixis Commodity Markets Ltd. in London who predicted higher prices last July, nine months before they reached a record. “If you remain positive on the basic growth story out of China, and the other developing countries, the fundamentals in the tin market have not changed that much.” Read More ...