Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

Tin shackled by surplus, but green industry demand poised to mop up supplies

Published 01/24/2024, 07:28 AM
Updated 01/24/2024, 07:30 AM
© Reuters. Unlicensed miners work in a tin mining area in Toboali, on the southern shores of the island of Bangka, Indonesia, April 29, 2021.  REUTERS/Willy Kurniawan/File Photo
TIN
-

By Pratima Desai

LONDON (Reuters) - The potential for a build-up of tin supplies this year is likely to put pressure on prices, but accelerating demand from the energy transition sector, including solar panels and electric vehicles, should support prices in the future.

Tin is used in circuit-board soldering for products like mobile phones and in electric cars and also in the manufacture of solar panels. Solder currently accounts for about half of global tin consumption.

Sluggish demand particularly from the semiconductor industry pushed the market into surplus for the past two years. This was despite a ban imposed last August on tin mining in Myanmar's Wa region, which exports to China, the top producer of refined tin and also the biggest consumer.

The Wa state authorised a partial resumption of mining from January 3 "with the notable exception of the Man Maw mine area, which accounts for almost all tin production in the autonomous region", according to the International Tin Association.

Tin prices on the London Metal Exchange (LME) have dropped 20% to around $26,500 a metric ton, since hitting a six-month high at $32,680 in January last year.

"The market may ease in 2024, especially if more supply comes through from Myanmar," said Bank of America strategist Danica Averion.

"Against near-term headwinds, fundamentals look robust longer term on solar and electric vehicles."

Bank of America estimates the tin market surplus at 5,800 tons last year and global consumption at 360,400 tons.

Myanmar accounted for 72% of China's total imports of tin ores and concentrates last year, amounting to more than 180,000 tons, compared with a number above 187,000 tons or nearly 77% in 2022, according to Trade Data Monitor (TDM).

Short-term support for tin prices could come from Indonesia, the world's second largest producer of refined tin after China.

"Over the last few years, we have seen Indonesian tin exports slump in the early months of the year due to export licence renewals," Citi analysts said in a December note.

Longer term, investment in and sales of electric vehicles and solar panels will see tin consumption pick up pace.

© Reuters. Unlicensed miners work in a tin mining area in Toboali, on the southern shores of the island of Bangka, Indonesia, April 29, 2021.  REUTERS/Willy Kurniawan/File Photo

"Tin demand from the green sector could more than double by 2030, potentially topping 70,000 tons per annum equivalent to a fifth of current consumption," Averion said.

"This suggests that fundamentals are set to remain strong and the focus will be on the supply side and the extent to which producers will be able to meet this additional demand."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.