Tin prices have declined by 17 per cent over the past month and they are likely to be under pressure until the first half of 2023 due to the strength of the dollar and slack demand.

“We anticipate that prices will remain pressured over H123 as the global economy continues to slow,” said Fitch Solutions Country Risk and Industry Research, a research unit of the Fitch Group. 

“At present, demand in the domestic spot market is sluggish, accelerating the growth of social inventories. On the other hand, from a global perspective, the supply growth of tin ore will be limited,” said SMM (Shanghai Metal Market) News. 

Currently, tin’s three-month contract on the London Metal Exchange (LME) is ruling at $25,680 a tonne while for cash it is quoted at $25,875.

2023 price forecast

“Tin futures have dropped to $25,000 a tonne on demand uncertainty and a firmer dollar under higher-for-long interest policy by the (US) Federal Reserve halted a rally” said the Trading Economics Website.

Prices had ruled at $32,000 a tonne and in October, they had nosedived to $17,500. 

Tin, mainly used in the electronics industry as a solder material, is used in various purities and alloys such as lead and indium.​ About 50-70 per cent of tin production is used in electronics and electrical industries such as in mobiles, tablets, computers, watches, clocks, and other consumer electronic devices.

“We maintain our tin price forecasts for 2023 at $20,000/tonne, as once again strengthening dollar places a cap on metal prices while Mainland Chinese demand displays a slow recovery after the country’s shift away from its zero-Covid policy,” said Fitch Solutions. 

Factors for dip

SMM News said the short-term tin prices will barely rise, dragged by weak fundamentals. The availability of substitutes like aluminium and tin-free steel for producing metallic products like containers is hindering the market’s growth, said Mordor Intelligence.

Fitch Solutions said after touching $30,959/tonne in 2022, a combination of demand-side factors caused a major decline in prices in the past months. “Worsening economic indicators and elevated levels of inflation mean weaker consumer spending on electronics, a major source of tin demand,” the research agency said. 

SMM said with the recovery of market confidence, tin prices are expected to regain upward momentum in 2023. 

Mordor Intelligence said the global rise in demand for smartphones, electronics and electrical vehicles (EV) will buoy the metal’s prices. 

EV boost

“In the long term, prices will edge higher as demand remains robust and the market surplus narrows from 2024 onwards,” said Fitch Solutions.

In the medium term, surging demand from the EV market and increasing applications in the electrical and electronics industry will likely drive the market, said Mordor Intelligence.

Shifting focus toward recycling tin is expected to create opportunities for the market in the coming years, it said. 

According to the International Tin Association (ITA),  global refined tin production in 2022 is estimated to have reached 3,80,400 tonnes, up 0.3 per cent from 3,79,400 tonnes in 2021. 

ITA said production is expected to increase marginally in 2023 as the positive news of China reopening after the removal of Covid curbs has been weighed down by challenges in Indonesia and South America.