Not since the bronze age of roughly 4000 years ago has demand for tin been so strong nor the price as high, reaching a record three weeks ago of $58,900 a ton.
Bronze tools and weapons made with an alloy of tin and copper soaked up tin in earlier eras whereas today it’s the solder used to connect metal components in computer circuit boards which is the new market for an old metal, earning it the nickname of the “glue” in electronics.
Artificial intelligence (AI) data centers have supercharged demand for tin-rich solder which, under the latest health regulations, must be lead free.
Solder is the primary market for tin today, with other uses such as tin-plating, which is driving an annual 3.5% increase in demand, falling short of an estimated 3% rise in supply.
The result of that supply/demand imbalance best explains tin’s 64% rise over the last 12 months from around $33,000/t to last trades on the London Metal Exchange $54,185/t, down slightly on the record price of earlier this month.
The tight market and important use in electronics also explains why tin is listed as a critical metal by most governments concerned about Chinese dominance of important commodities.
Biggest winner so far from the tin boom is PT Timah, a government-controlled mining company listed on the Indonesia Stock Exchange.
Timah has seen its share price rise by 260% over the last 12-months, with that outperformance boosted by it being the recipient of tin mining and smelting businesses confiscated by the government during a crack-down on illegal mining and tin smuggling.
A similar picture of strong share price moves can be seen on other stock exchanges, including Australia where tin-exposed Metals X is up 160% over the past 12-months and Elementos which has risen by 270%.
The unusually high price for tin is largely a result of its being produced in relatively small quantities, rating it as the smallest of the so-called base metals with annual global output an estimated 370,000 tons a year, a fraction of copper’s 23 million tons.
Along with scarcity as a price driver the tin price benefits from supply being dominated by a handful of relatively high-risk countries, including China, Myanmar, and Indonesia, with smaller contributions from Australia, Peru, Brazil and the Democratic Republic of Congo.
The high tin price is encouraging attempts to restart old mines around the world, including Britain where deposits of tin in Cornwall and Devon were worked by Roman miners more 2000 years ago.
One of the oldest mines in Cornwall, South Crofty near St Ives on the north coast, is in the process of being redeveloped by London Stock Exchange listed Cornish Metals.
It’s the combination of tight supply and rapid growth in demand for safe solder in electronics which is expected to see the tin price remain high and possibly continue rising unless substitutes are developed in the same way tin took over from lead.
