Tin demand poised for long-term boom despite easing prices

Supply headwinds in the tin market so far in 2024 and the recent sell-off in the futures market show that demand is recovering more slowly than anticipated because of the poor macro-economic climate, but in the long-term, market participants still expect demand to grow due to the energy transition

The official cash price for tin on the London Metal Exchange fell by almost 12% in July, which was its steepest decline since August 2023 and made it the worst performer across the base metals complex. Fastmarkets analysts said that had led to sentiment toward tin turning negative, with hedge funds then piling in to acquire short positions.

The market has been largely buffered by sufficient consumer, producer and exchange inventories, along with the slower-than-expected turnaround in demand, which has shielded tin somewhat from coming under too much pressure from supply challenges.

And tin consumption is expected to pick up pace due to increased investments in electric vehicles (EVs) and solar panels as part of the energy transition trend, Fastmarkets understands.

“We are now pinning [our] hopes on rising installations of solar panels, because the traditional demand from electronics consumption is losing momentum,” a Singapore-based trader said, adding that sentiment is still bullish towards the metal in the long term.

Tin has been a foot soldier in the ongoing energy transition, with 10% of tin now used in generation of renewable energy, through its use a solar ribbon and glass coating in solar panels.

Its primary application, up to 49% of tin use, remains in its use as electronic solder for linking electrical components and in circuit boards, including those in mobile phones and electric cars. Yet a substantial portion of soldering is employed in semiconductor connections, according to the International Tin Association (ITA).

Semiconductor sales declined sharply through 2022 and into early 2023, but have bounced back since the second half of 2023. Mirroring this change, the tin price on the LME witnessed a similar downtrend in 2022, with its price sinking below $20,000 per tonne.

In May 2024, global semiconductor industry sales reached $49.1 billion, an increase of 19.3% compared with May 2023’s $41.2 billion and up 4.1% compared with April 2024’s $47.2 billion in sales, according to the latest report from the Semiconductor Industry Association (SIA).

“The artificial intelligence (AI) boom is another factor that will drive up tin demand over time, although the effect is not fully priced-in yet,” a source told Fastmarkets.

Alongside the demand expectations, however, tin has historically thin liquidity and limited availability, which means it is prone to price volatility. This has been particularly true this year, with the tin market facing both raw materials and refined metal supply challenges, due in large part to the export policies in leading producer Indonesia and in Myanmar.

Reflecting the metal’s growing importance and Asia’s key role in its production and consumption, Fastmarkets launched an FOB Singapore tin ingot premium on Tuesday, August 6.

We price over 1,500 metals market prices

Market-reflective prices, specialist forecasts and expert analysis of the global metals and mining market to help minimize the risk today and plan for the future. Find out more.

What to read next
The global copper market has finally received the widely anticipated news that imports to the US will be tariffed from August 1. The finer details of the tariffs, including their scope, and whether key copper-exporting nations like Chile, Canada and Peru will be exempt, remain unclear.
LME copper prices took a significant hit following US President Donald Trump's announcement of a potential 50% tariff on copper imports. The uncertainty surrounding the timeline and implementation of the tariff has left market participants hesitant, with analysts noting its immediate impact on price momentum and trading activity.
Fastmarkets has launched MB-AL-0424 Aluminium P1020A premium, fob Indonesia, $/tonne on July 9 due to an expected increase in Indonesia-origin aluminium exports. MB-AL-0424 Aluminium P1020A premium, fob Indonesia, $/tonneQuality: P1020A or 99.7 % Minimum Al purity (Si 0.10% max, Fe 0.20% max) in line with LME specifications. Ingot, T-bar, sowQuantity: Min 500 tonnesLocation: FOB IndonesiaTiming: […]
To increase the transparency of our methodology, Fastmarkets clarifies that the quotation period of the MHP nickel payable indicator is the month of delivery, or the month M. Any data points Fastmarkets received otherwise will be normalized to the M month based on the monthly spreads of the prevailing exchange-traded Class-1 nickel reference price, or […]
The US needs well-defined and stable policy around critical minerals, energy transition and trade, while derisking projects and maintaining good relations with other countries to be able to establish sustainable electric vehicle (EV) and energy storage systems (ESS) supply chains in North America, according to industry experts.
'Probably miscalculated’ assumptions at Kakula mine force Ivanhoe to overhaul entire Kamoa-Kakula complex, explains CEO Marna Cloete.