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BMI View: We maintain our tin price forecasts at USD16,500/tonne in 2016 with gradual increases to
USD20,500/tonne by 2020 as the global tin market posts sustained market deficits and inventories dwindle.
However, the strong rally in H116 will fade over the coming months as a narrowing deficit will ease supply
constraints. As a result, we are neutral towards H216.
Latest Developments And Structural Trends
? We maintain our tin price forecast at an average of USD16,500/tonne in 2016 and USD17,500/tonne in
2017. Although the supply constraint in the tin market has eased in 2016 (we forecast a deficit of 4.6kt)
as compared to 2015 (deficit of 6.7kt), the price rally has run ahead of the fundamentals. This is because
of a combination of speculative trading and positive investor sentiment stemming from China's economic
stabilisation in H116 and the market reacting strongly to the steep refined tin deficit in 2015, after a
surplus of 13.9kt in 2014.
? Tin prices have bottomed in 2016, although the rally in the year-to-date is not representative of the long
term outlook for the metal, and cannot be sustained. Chinese refined tin production and consumption data
show that there has been a rapid narrowing of the market deficit in the year-to-date, which brought us to
revise our forecasts to show a smaller global deficit in 2016 than 2015. Thus, we expect the price rally
will ease over the coming months as a narrower deficit will start to reflect in prices, giving way to more
gradual and modest increases in the coming years owing to shrinking inventories and prolonged deficits.
We expect the deficit to narrow gradually from 4.6mnt in 2016 to 2.3mnt by 2020, and are thus
maintaining our price forecasts for now.