From Darling to Doubt: What’s Next for Tin Prices After the Decline?

从宠儿到被质疑,锡价回落后接下来会怎么走?
Published on: Jan 18, 2025
Author: Amy Liu

Before 2024, tin had been a star among the base metals on the London Metal Exchange (LME), with year-to-date gains exceeding 40% in both April and July. However, by the end of December, this gain had shrunk to just 15%. Although tin remained the best-performing metal on the LME, it was only slightly ahead of zinc. The reason for this shift was that investors lost confidence in the bullish outlook for tin, cutting back on bets for further price rises, leading to a dramatic drop in tin prices.

Disappointed bulls had hoped for higher increases, perhaps even a repeat of the supercharged rally of 2022 when the price of LME three-month tin reached an all-time high of $51,000. Unfortunately, that did not happen. Tin peaked at $36,050 in April but failed to return to that level despite multiple attempts in May and July.

While the bulls focused on the supply issues with tin, the demand side also faced challenges. This year, the outlook for tin will depend on which side—supply or demand—recovers faster.

On the demand side, the International Tin Association (ITA) released its annual survey results in October last year. The results were shocking, showing a decrease in tin usage in the industry by 3.9% in 2023, far worse than the expected contraction of 1.9% from the previous year. When considering the use of tin in unrefined form, the decline in demand for 2023 reached as much as 4.9%.

On the supply side, issues persist. As the world’s largest exporter of refined tin, Indonesia saw its shipments decline by 33% to 46,000 metric tons in 2024. Meanwhile, tin production in Myanmar’s Wa State saw an even larger drop of 40%. In the first half of 2024, China’s imports from its neighboring country averaged 55,000 metric tons per month but fell to an average of 4,000 metric tons from July to November.

According to Tom Langston, senior market analyst at the ITA, the supply of tin is highly concentrated, and there is insufficient investment in new mines within the industry. The association projects a global supply deficit of 13,000 metric tons by 2030, driven by increased solder demand from the green energy and artificial intelligence sectors.

Despite this, there was no significant shortage of tin in 2024, which is a crucial reason why bullish fund managers turned bearish on tin prices toward the end of the year.

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