The increasingly violent confrontation with government forces has displaced an estimated 800,000 people and key access roads to Goma are now under rebel control.
The International Tin Association (ITA), which has been monitoring, opens new tab the fast-deteriorating situation in North Kivu, notes that while there is no evidence yet of tin exports being halted, "delays may be expected as mineral shipments are rerouted further north and south away from rebel-controlled areas."
It's the last thing Asian smelters need right now, given the continued uncertainty around the status of the Man Maw mine in Myanmar.
The mine is controlled by the semi-autonomous Wa State, which ordered the suspension of mining activities last August. Surface stocks have continued to be shipped across the border, but Chinese smelters have been lifting imports from other countries to compensate, including the Congo.
METAL SQUEEZE
At least one tin supply disruption is abating as Indonesian authorities catch up on delays to the annual export licensing process.
Two of the country's largest producers, including PT Timah (TINS.JK), opens new tab, have now restarted exports, according to the ITA.
However, the sharp drop in Indonesian shipments to just 55 tons over the first two months of this year is already tightening the Western market.
LME headline tin stocks have slumped by 46% to 4,145 tons since the start of the year and are now the lowest since last July. Excluding metal earmarked for physical load-out, available stocks are just 3,650 tons.
The stocks squeeze has rippled through LME short-dated time-spreads. In the space of three weeks, the benchmark cash-to-three-months period has shifted from a contango of more than $200 per ton to a backwardation of $84 as of Wednesday's close.
DEMAND RECOVERY
The draw on LME stocks also attests to a demand recovery in the electronics sector, where tin is used in circuit-board soldering.
The sector, accounting for about half of all global tin usage, saw falling sales last year as a cost of living squeeze in many Western countries suppressed demand for new purchases of electronic goods.
However, semiconductor sales, another useful indicator of electronic goods demand, seem to have troughed around the middle of last year and have been recovering ever since. Global sales in February were up 16% on last year, according to the most recent figures, opens new tab from the Semiconductor Industry Association.
It's noticeable that the tin price has been closely tracking the Philadelphia Stock Exchange Semiconductor Index, which has surged by 52% from its January low.
But the two have diverged over the last few days, suggesting that tin is now trading on its own momentum as much as its fundamentals.
FUNDS RUSH TO BUY
Fund money has surged into the London tin market and positioning is now as bullish as it was during the mega rally of 2021 and early 2022.
Investment funds have lifted long positions to 3,134 contracts, which is the highest level since the LME started publishing its Commitments of Traders Report in 2018.
The position is equivalent to 15,670 metric tons, which doesn't sound like much until you consider the level of LME inventory.
Funds are net long of the tin contract to the tune of 2,371 contracts, which is just short of the March 2022 peak. That's down to the fact there are still shorts in the London market, whereas there were almost none when the price was rocketing up to $50,000.
It's worth noting that positioning in the LME's "Other Financial" category, which captures index and insurance entities, flipped to net long in January with the position now at 328 contracts, the most bullish it's been since the start of 2022.
Tin is a relatively small LME contract and the scale of speculative inflows injects extra unpredictability into an already volatile market.
That underlying volatility is only going to get worse as the number of potential supply threats multiplies.