The metal has been used since ancient times. From the Bronze Age until the 18th century, when it was supplanted by porcelain, tin was the main ingredient in alloys used for kitchenware. Yet it is also extremely modern. Its conductive properties mean that its main use today is as a solder in the construction of electric cars, electronic circuits and solar panels—all central to automation and the energy transition. Lately the market for tin has caught fire. At nearly $38,000 a tonne (see chart), its price on the London Metal Exchange (LME) is up by almost a third since the start of the year. It has been the best-performing metal this year—shinier even than gold.
The overall market size is tiny: some 380,000 tonnes of tin were refined last year, compared with 26m of copper, another important industrial ingredient. Three countries—China, Indonesia and Peru—accounted for 74% of global output, meaning subsequent supply disruptions have had an outsize impact. In mid-March Alphamin, a firm that operates a large mine in the Democratic Republic of Congo (DRC), suspended production because of attacks by insurgents. Indonesia is planning to take a bigger slice of profits, creating a risk that domestic output slides further.
It is also uncertain when output from Myanmar, once the world’s third-largest producer, might return. In 2023 the ethnic militia that controls Wa state in the north-east, which is the source of most Burmese tin, suspended mining. Earlier this year, it indicated that production would resume soon, and started processing licences. But the catastrophic earthquake that hit Myanmar on March 28th might delay things.
Meanwhile, demand, having grown by 11% since 2019, is expected to rise further still, setting up supply deficits for the rest of the decade. It is not clear where more tin might come from. Most miners are unlisted firms that disclose little about their prospects. Investors are bullish: bets on the metal on the LME have hit unusually high levels, and the market’s illiquidity has amplified price movements. Niche hedge funds focused on minor metals are being joined by opportunistic generalists, as well as “momentum” traders.
Prices could well keep rising. Indonesia has threatened to restrict exports. China could falter. But the boom will not last for ever. Marcus Garvey of Macquarie, a bank, expects “demand destruction” as tin buyers start to use less solder. A reopening in the DRC or better news from Myanmar might panic investors, causing prices to crash. The tin market is no stranger to exaggerated swings. During covid-19 lockdowns, booming demand for electronics sparked a rally—before reopening triggered a severe correction. The metal’s history is as turbulent as it is long. ■
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