China Boosts Tin Ore Imports from Myanmar as Indonesian Supply...

China Boosts Tin Ore Imports from Myanmar as Indonesian Supply Dries Up

September 9, 2013

Reuters

* China's imports from Indonesia fall sharply on new rules

* Boosts shipments of tin ore and concentrate from Myanmar

* Myanmar a small player, but may grow long-term - ITRI

By Melanie Burton

SINGAPORE, Sept 9 (Reuters) - China's tin industry is turning to
Myanmar to help plug a gap in the supply of raw materials after new
trading rules in the world's top exporter Indonesia squeezed its major
source of refined tin.

China, the world's top metals consumer, has more than doubled its
imports of tin ore and concentrates from Myanmar this year, shoring up
an alternative source of the metal used mainly for solder in its vast
electronics industry.

Pulling in more ore from Myanmar -- still a relatively small player --
will add to China's efforts to source tin from Bolivia, Japan,
Malaysia and LME stockpiles, and could crimp sales by Indonesia in the
long-term, said industry experts.

"Myanmar isn't going to solve China's problems - Indonesia is the
dominant exporter in the world," said Stephen Briggs of BNP Paribas in
London. "But China is clearly trying to diversify its sources, whether
it's tin or anything else. It certainly isn't a great thing for
Indonesia."

China has relied on Indonesia for the bulk of its tin imports, taking
more than 15,000 tonnes last year, but sales have slumped since the
Southeast Asian nation ruled that producers could only sell ingots of
the highest purity, a move aimed at boosting the value of its exports.

The Indonesian market has been further muddied by government attempts
to ensure all of its tin is traded through a local exchange, a move
which has yet to gain traction with customers, and its biggest
exporter has halted shipments.

China's imports from Indonesia fell 72 percent in July from a year
earlier to just 484 tonnes of refined tin.

By contrast, tin ore shipped from Myanmar across the border for
processing in Yunnan, China's key tin producing province, more than
tripled in July to 8,392 tonnes, China trade data shows. Imports for
the first seven months of the year are already more than total for the
whole of 2012.

The Myanmar figures are for tin ore and concentrate and do not specify
tin content, so it is not possible to work out how much tin would be
produced from the increased exports.

Traders put Myanmar's total production at the "low single-digit
thousands" of tonnes, compared with 100,000 tonnes for Indonesia.

China also produces about 100,000 tonnes of tin a year, but faces a
shortfall of 50,000-60,000 tonnes, which it meets through recycling
and through imports of unrefined ore and refined tin, said Peter
Kettle of global industry group ITRI.

Chinese buying could help speed development of Myanmar's fragmented
industry as political changes lead to increased investment.

"We could see Myanmar emerging in the long run as quite an important
tin producer," said Kettle.

"There is quite a bit of interest in the long-term with the changes in
the political regime and encouragement of international investment,"
he said.

Traders are also eyeing the country but say China is likely to be the
dominant buyer for the near future.

"We make some efforts to get into that country but it's not easy,"
said a source at an international trading house.

"There is a lot of artisanal mining there. You need to be prepared to
go into the country and pay people in cash and arrange logistics
yourself, and I'm sure the Chinese are able to do that," he said.

(Additional reporting by Aung Hla Tun in Yangon; Editing by Richard
Pullin)