Tin prices have nearly doubled from a year ago and are on course for their biggest annual rise in over 30 years, stinging big users of the soldering agent such as electronics firms, utilities, solar panel makers and appliance manufacturers.
For automakers, which use tin in coatings, bearings, brake pads and batteries, the higher tin costs come on top of a semiconductor chip shortage and a spike in prices for aluminum and magnesium due to curbs on energy-intensive industries in China.
Tin, whose main use is as a solder, has outperformed other industrial metals in 2021, gaining over 90 percent on the London Metal Exchange (LME). It is on course for its biggest annual rise since trading was relaunched in 1989, four years after the collapse of the International Tin Council forced a suspension.
LME tin surged past $40,000 a ton for the first time last week, while in China, the world’s biggest refined tin market, prices are up around 100 percent on the Shanghai Futures Exchange this year.
“There are few places in the value chain which are not feeling the pain of a higher tin price,” said CRU senior consultant Willis Thomas.
He added, however, that photovoltaics (PV) companies, which use solder ribbon to join solar cells, would likely be the most severely affected, since they have less opportunity to pass on added costs to their customers due to “red-hot price competition in PV panels.”
Cui Lin, chief China representative at the International Tin Association (ITA), estimates tin demand from the PV industry will rise to about 15,000 tons this year, versus only 8,000 tons in 2019.
“The stock keeps decreasing, which has affected the price quite dramatically,” she said.
Tin inventories in LME-registered warehouses MSNSTX-TOTAL slipped to their lowest since 1989 at the start of November and are currently at just 1,365 tons. ShFE stocks SN-STX-SGH are near a five-year trough.
Chinese tin smelters have had to reduce output due to curbs on power consumption this year, although not to the same extent as aluminum and magnesium makers, while a host of other tin supply constraints have worried the market. — Reuters
