Uis tin mine, in Namibia
Fitch Solutions Country Risk & Industry Research is confident that the price of tin will average between $38 000/t and $42 000/t this year and next, as a result of rapid demand growth outpacing still-recovering supply.
The research agency first had its tin price forecast for 2022 and 2023 set at between $29 000/t and $32 500/t before witnessing a continued surge in prices to new record highs in the year-to-date.
Fitch Solutions explains that the latest tin price rally has been fuelled by speculation of export restrictions from Indonesia – the world’s largest tin exporter – as reports emerge of the government delaying new export permits owing to administrative problems.
As of February 16, the tin price was about $43 549/t in a build-up that started in March 2020.
The agency notes that severe supply tightness from Covid-19 lockdowns have ensued since then, particularly in Malaysia and Indonesia, which account for about 30% of global refined tin production.
In turn, solders in semiconductors, for which tin is used, have experienced a spike in demand throughout the pandemic, owing to their use in medical, home equipment and personal devices.
High prices for refined tin will start to result in rationing of demand by electronics manufacturers as they struggle to pass on higher input costs to end-users.
Fitch Solutions expects the tin market’s fundamentals to ease slightly over 2022 and 2023, as supply increases in Malaysia and China, but says demand will continue to outstrip supply, pushing the market into deficit by 2026.