Tin raced to record heights recently
Tin prices raced to an all-time high in May 2021, firmly cementing tin as one of the best performing metals over the last eighteen months, says Roskill. Tin prices collapsed to a four-year low in March 2020, as COVID-19 restrictions were imposed across large parts of the world but have since enjoyed relatively consistent growth.
The growth has been buoyed by recovering demand, particularly in the consumer electronics sector and by severe supply shortages, leading to increasing market tightness. This market tightness has continued into Q2 2021, with LME cash prices exploded to US$34,462/t in early May and LME stocks once again dropping below 1,000t for the second time in 2021, falling as low as 755t in late May.
Prices remained above US$30,000/t throughout Q2 2021 and stocks remain under pressure. Despite the rolling out of global vaccine programmes, market tightness looks set to remain through the second half of 2021 with demand recovering strongly and supply continuing to remain disrupted across Asia and Africa.
Over 72% of refined tin production is attributed to China, Indonesia, and Malaysia, with 13% of remaining refined output accounted for by Peru, Bolivia, and Brazil. This geographical concentration of the tin supply chain left the refined tin industry relatively exposed to government responses to COVID-19, with several of the major refined tin producers implementing output cuts and operation suspensions as a result of the pandemic. Year-on-year refined tin production, between 2019 and 2020, fell by nearly 7% as a result of these measures.
Global tin demand faltered in 2020, suffering its first decline since 2015 and largely as a result of the impacts of COVID-19. This slump was only temporary and demand recovered strongly in the second half of 2020 and into 2021, driven by a boom in consumer electronic demand. Looking ahead, beyond 2021, demand is set to continue to grow, buoyed by several applications that are set to grow rapidly over the outlook period.
The rollout of 5G networks is set to boost the telecommunications and other electronics sectors. Smartphones account for over a third of all consumer electronics and, after several years of subdued demand, are set to drive consumer electronic consumption once again.
The emergence of smart home devices over the last decade has boosted consumer electronics output; such devices accounted for only 2% of output in 2011, but rose to nearly 23% of the total in 2020.
