The greatest drivers for
Internet of Things and climate change.
Demand Landscape
Researchers from the Massachusetts Institute for Technology (MIT) in the United States have estimated that tin is the metal most likely to be positively affected by future technology.
Currently, tin is primarily used for soldering circuit boards, but researchers predict that tin will be the material of choice for the next generation of energy-generating and -storage devices. The explosive growth seen in recent years of new sectors, such as Artificial intelligence (AI), data centres, semiconductors and solar energy, is expected to continue.
Being the “glue” that holds all these components together, tin is a vital component in the manufacturing of all electronics including electric vehicles, advanced robotics, renewable energies, and advanced computing.
Demand for tin has historically grown at a steady 2%–3% per annum. The depletion of existing mine reserves and growing regulations have meant that global supply is unlikely to keep up with future demand.
Extract from the International Tin Association China Tin Industry Review 2023: “…the continued recovery in the semiconductor industry and slowing yet still high growth in new energy sectors will push world tin demand up by 4.4% to 376,300 tonnes in 2024, with China’s tin consumption to rise 3.9% to 189,100 tonnes. After an 8.2% slump in global semiconductor industry sales last year, a 13.1% market growth is projected for 2024 by WSTS, signaling a robust demand recovery.”
Supply Landscape
Four countries have historically produced 70-80% of global tin concentrate supply, but this is changing:
- China’s mined tin output has fallen 28% over 10 years and stability is faltering
- Indonesian mined tin is decreasing steadily while refined export restrictions exacerbate
- Myanmar’s mined tin is decreasing while mining bans exacerbate the situation
- Peru’s recently recovered mined tin may be temporary and social unrests remain a threat
China is a growing net tin importer but has constrained tin mining. In 2023, China imported an estimated 40,600t of contained tin in ores/concentrates from Myanmar, a decrease of 7,100t or 15% from 2022.
World mined tin production is under pressure, with inflationary pressures and challenging mining jurisdictions pushing up the cost curve for new entrants into the market.
Production problems in Indonesia and Myanmar, as well as the increasing cost curve, are the main drivers of the changing supply landscape:
- Cost of energy, inflation and difficult mining conditions in Indonesia and Myanmar are pushing up operating costs
- Indonesia and Myanmar are also facing a threat of export restrictions on tin concentrates
- The tin market is suffering from severe under-investment in resources and development over the past few years. The “low-hanging fruit” has been mined out
- New projects and mine expansions need to “see” a sustained robust tin price increase, with expansion projects requiring long lead times before coming into production
International Tin
Association Full Costs Curve
Source: International Tin Association
Marginal producers at the higher end of the cost curve are not profitable at the current tin price.
Tin
Price
The tin market fundamentals have been significantly impacted in recent years by increased demand seen from the solar, AI (computing and data storage) and networking (5G) industries.
Under-investment in discovering and developing new tin mines have resulted in a constrained supply landscape, which sets the scene for a potentially prolonged bull market for tin.
The long-term fundamentals of the tin market remain positive and, coupled with the rich grades of the Bisie tin complex, provides Alphamin with a robust buffer from any potential market fluctuations.
source: tradingeconomics.com