Tin prices, which topped $25,000 a tonne at close on the London Metal Exchange on Tuesday, are likely to rule firm for the remainder of the year and in the first quarter of 2024 on increasing demand and tight supplies, say analysts.
“LME tin price rallied somewhat this (last) week, approaching $24,800 after a sharp drop to a six-month low at the end of October, amid broader bearish sentiment across base metals,” said Tom Langston, Senior Market Intelligence Analyst, International Tin Association (ITA).
“...global supplies have tightened over the course of 2023 thus far… TSM (Taiwan Semiconductor Manufacturing) believes the semiconductor industry is close to a bottom and about to enter the next cyclical upturn,” said research agency BMI, a unit of Fitch Solutions.
“Tin prices increased by 2 per cent in Q32023 from the previous quarter due to supply disruption concerns. The closure of mines in Myanmar, aimed at preserving remaining tin resources, is impacting China’s raw material supply,” said the World Bank in its Commodity Outlook.
Tin mining and processing operations in Myanmnar’s key-producing region of Wa have remained suspended since August. The region accounts for nearly one-sixth of the global production and is the main supplier for manufacturers in China.
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“Consequently, the world’s top consumer was forced to seek tin from alternative sources, driving imports from the Democratic Republic of Congo to soar by 24 per cent in the first three quarters of the year, raising buying competition in other global benchmarks,” said the Trading Economics website.
“Along with rising tin demand from the semiconductor industry, the banning of tin mining in Myanmar’s Wa region as well as Indonesia’s tin ingot export ban will ensure the global tin market remains tight in the coming months,” said BMI.
Langston said though a demand boost in fourth quarter festival season appeared uncertain, the Chinese electronics market and the solar sector remained bright spots.
“Recent negative updates from Wa State have pushed back mine reopening estimates, bringing supply resilience into sharper focus as we look towards Q1 2024,” he said.
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BMI said it has raised “slightly” its tin price forecasts for 2023 to $25,700/tonne from $25,000 previously as prices remain elevated amid improving demand and tight supplies.
Reached a trough
“Global semiconductor sales data show that the decline in demand for semiconductors since mid-2022 has reached its trough, with sales increasing steadily since July 2023,” the research agency said.
The World Bank, however, said prices of tin — which is used in photovoltaic installations, electric vehicles, and electronics — are expected to decrease by an additional 4 per cent in 2024 from 2023.
“Demand for tin, a key component of electronic manufacturers, is expected to remain subdued reflecting weak economic activity in major economies in 2024,” it said.
BMI anticipates the soldering metal prices to edge higher in 2024 as the seaborne market will witness a fall in supplies as Myanmar’s mining ban extends and Indonesia’s ban on tin export comes into force.
The research agency forecast global refined tin production to increase by 1.4 per cent year-on-year in 2023. It expects continued supply growth as new projects in Peru and Malaysia realise a full year of output.
It also revised its forecast higher for global refined tin consumption, which will likely grow by 2.3 per cent y-o-y in 2023 and 2.4 per cent y-o-y in 2024.