Is tin taking off? - Beer &...

DATE: PREPARED BY: PREPARED FOR:

Beer & Co 4th Tin Conference

Is tin taking off?

22 Nov 2016 Peter Kettle & Tom MulqueenITRI Board Meeting

Forecast

April 2013

Trend following fundsStocks not quite low enough yetDemand growth has stalled in last decadeMyanmar has filled predicted supply gapChina over-supply

Is tin price taking off now?

Headwinds in 2015 - 2016

What happened?

Myanmar !

HeadlineMyanmar supply still uncertain

10-fold increase in production in four yearsMove to underground miningBig investments in equipment, processing, roadsOre grades falling from 10%+ to 2 – 3%Big stocks of low-grade ore and concentrateNew discoveries?

HeadlineThe big five tin mining countries

’000 tonnes tin-in-concentrate

Slump in Indonesian exports

12-month rolling total of tin exports

New export regulations from 1 July & 30 August 2013,November 2014, August 2015

Higher ore buying prices may stimulate production?

Looking good now !

Total reported refined tin stocks

’000 tonnes refined tin

Weeks’ supply by application, end 2015

Consumer tin stocks relative to usage: averages by industry sectors

Weighted averages from 80 companies

providing stocks data.

World tin use growth stalled

Post-war reconstruction

to oil crisis

Electronics & lead-free solders

Cans and cars

’000t refined tin

2016 Tin Use & Recycling Survey

ITRI estimates of 2015 refined tin use by regionITRI estimates of 2015 global refined tin use, market share, by sector

Applications: China vs Rest of World

China Rest of World

Data: ITRI Surveys

Global visible stocks falling

World Supply/Demand Balances in Refined Tin('000 tonnes) Estimate Forecast

2012 2013 2014 2015 2016 2017WorldWorld Refined Production 334.7 340.1 369.2 333.0 336.1 340.5DLA Sales 0.0 0.0 0.0 0.0 0.0 0.0World Refined Consumption 339.4 349.0 357.8 345.7 347.8 353.5Global Market Balance -4.7 -8.9 11.4 -12.7 -11.7 -13.0

Reported stocksLME 12.8 9.7 12.1 6.1 3.0 2.0SHFE 0.0 0.0 0.0 0.8 2.5 2.0Producers 15.9 13.7 15.8 14.0 10.0 7.0Consumer/other 10.7 10.9 11.2 11.3 9.0 8.0Total 39.5 34.3 39.1 32.2 24.5 19.0World Stock Ratio(weeks consumption) 6.0 5.1 5.7 4.8 3.7 2.8

Regional supply/demand balances

China surplus supply vs Rest of World shortfall

’000t refined tin

Surplus

Deficit

Production costs indicate medium-term average price

2020 ITRI Tin Mine Full Costs (NBP)US

$/to

nne

of ti

n

Looking good now !

Trend following funds- Not quite out of five year downtrend

Stocks not quite low enough- Close to historical low, depletion of consumer and raw material stocks?

Demand growth has stalled in last decade- Mixed signals but consumption stable in 2016

Myanmar has filled predicted supply gap- Production at (temporary?) peak, few/no-alternatives

China over-supply- Possible cap on price recovery

Is tin price taking off?

ITRIUnit 3, Curo Park

Frogmore St. Albans Hertfordshire

AL2 2DDUnited Kingdom

+ 44 (0)1727 875544www.itri.co.uk

ITRI China Room 1606, C2 Tower,

Jinmao Building,No. 18

Xizhimenwai Street, Xicheng District,

Beijing,China,

100044+86 10

6808 0915chinaoffice@itri.co.uk

www.itri.com.cn

We believe that global co-operation on markets, technology, sustainability and regulatory issues is the most cost effective route to achieve long-term success for the industry. If we work together effectively then the outlook for tin is very positive.

Global co-operation for long-term success

Thank You