Tin: a commodity of the future

Fitch Solutions’ industry research body,  BMI, has raised its tin price forecast for 2023 off the back of improving demand and tight supply.

Fitch has raised the outlook price of tin from $US25,000 per tonne to $US25,700 per tonne, as global semiconductor sales steadily increase. Semiconductors are used in electronics like computers and smart phones.

Along with rising demand for the metal, supply is tight following the ban of tin mining in parts of Myanmar, as well as a tin export ban in Indonesia.

Heading into 2024, surplus is expected to grow as global production (primarily from China and Malaysia) outpaces demand. However, due to the ban in Myanmar, and easing inflation that will boost demand growth, the market will tighten over the next few years.

“We expect rising demand for tin as we head into 2024 as inflation levels have started easing, and global semiconductor sales have started picking up,” Fitch said.

“On October 19, Taiwan Semiconductor Manufacturing (TSM), the world’s largest contract chipmaker, announced during its third quarter earnings report that it is observing some early signs of demand stabilisation in the PC and smartphone market.

“TSM believes the semiconductor industry is close to a bottom and about to enter the next cyclical upturn.

“For Mainland China in 2023, we anticipate the consumer electronics device market to see a more pronounced year-on-year surge as the zero-Covid strategy has ended and consumer expenditure, high street sales, and online trade avenues bolster purchases.”

Fitch has consequently revised up its forecast for global tin consumption to growth of 2.3 per cent year-on-year (y-o-y) in 2023 and 2.4 per cent y-o-y in 2024.

In the longer term, tin demand is expected to remain buoyant, driven by a thin pipeline of tin mining projects and a rapid increase in demand through electronics and solar panels. Fitch said this will cement tin as ‘a commodity of the future’.