LONDON (Reuters) – Rising refined tin output will cut the global market deficit next year and weigh on prices as new Chinese smelters ramp up and Indonesia also expands production, the International Tin Association said on Friday. Benchmark tin prices have already been the worst performer on the London Metal Exchange this year, sliding 16%.
“The average price has declined quite significantly from last year and we would expect next year to also be quite a difficult year for tin,” James Willoughby, manager of market intelligence for the association, told a seminar in London.
Refined output is expected to increase by 5.8% to 352,000 tonnes next year while demand rises by only 0.4% to 353,900 tonnes, according to ITA forecasts. That means the global deficit is forecast to fall to 1,900 tonnes in 2020 from 20,000 tonnes this year.
Willoughby, however, said the big deficit for this year may be revised down because producers are not thought to have stuck to cuts announced in September. The announced cuts amounted to about 30,000 tonnes, equating to about 8% of global supply.
“We have a significant deficit pegged for this year, but that assumes that refined producers stick to their production cuts,” he said.
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