LONDON: Tin prices rebounded on Thursday following a mining ban in part of the world’s third largest tin miner, Myanmar, and other industrial metals also rose on the back of US jobs data.
Three-month tin surged as much as 3.8% on the London Metal Exchange during Asian trading and was up 2.5% to $28,100 per metric ton by 1630 GMT.
In April, Myanmar’s ethnic minority Wa militia announced a ban on mining from Aug. 1 in areas that it controls, and the International Tin Association (ITA) confirmed on Wednesday that the ban had taken effect.
On Thursday, the ITA said the Myanmar ban was expected to dampen China’s tin smelter output in the second half of 2023, but gave no figures.
Tin, which is the best performing LME metal so far this year with a gain of 12%, is unlikely to see further strong gains, said Citi analyst Tom Mulqueen.
“Tin is quite a significant source of revenue for the (Wa) local government. One can question how long they would want to have a full ban,” he said.
“Tin demand is very weak and despite this ban in Myanmar, supply from South America and Indonesia has been robust in the second quarter.” Citi’s three-month LME tin forecast is $25,000 a metric ton.
Earlier in the session, a strong dollar weighed on other metals, but the dollar index reversed lower after US jobs data.
The data showed US worker productivity rebounding sharply in the second quarter, helping to curb growth in labour costs and offering another boost to the improving inflation outlook.
A weak dollar makes commodities priced in the US currency less expensive for buyers using other currencies.
Subdued demand in China, however, is likely to hold back metals prices in coming months, said Edward Gardner, commodities economist at Capital Economics.
“We have had fairly subdued PMIs coming out of China, with construction especially poor, which doesn’t bode well for industrial metals,” he said.
“It’s a difficult environment for industrial metals and we expect prices to tread water for the rest of the year.” LME copper climbed 1.3% to $8,618 per ton, aluminium gained 0.9% to $2,229, zinc advanced 0.8% to $2,501, lead added 0.3% to $2,152 while nickel rose 0.3% to $21,630.
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