Historical tin prices

The price of tin is dominated by the industrial chain, and the influence of supply side constraints on tin price is gradually increasing. Looking back at the price trend of tin over the past two decades, we note that the rise and fall of tin prices are closely related to the ups and downs of the semiconductor cycle, which shows that the pricing of tin varieties in the past was dominated by demand. While the booming development of electronic products in the past decade has driven the growth of tin demand, the constraints on the supply side have gradually emerged, and the influence weight of supply shocks on tin prices has gradually increased. In the trend since the beginning of 23, there has been a significant divergence between the semiconductor cycle and the trend of tin price, which we believe is mainly due to the supply shock caused by the short-term expectation of the ban on mining in Wa State and the few new projects in the next 2-3 years. Looking ahead, we expect that tin demand will continue to grow steadily, and rigid supply is expected to further promote tin price elasticity and support the upward movement of tin price center.

Before 2000: The tin industry grew slowly, shifting from tin plating to solder consumption. The emergence of aluminum, plastic, composite packaging materials has made the demand for tin plating continue to decline, and the thin layer of tin coating has reduced the single consumption of tin, under this background, the proportion of consumption and absolute consumption of tin plating has gradually decreased. At the same time, the development of the electronics industry has steadily increased the proportion of electronic solder consumption, and the tin consumption structure has gradually shifted to the electronics field and the chemical field.

2009-2012 cycle: Semiconductor volume repair and tin mine supply tightening, tin prices hit a new high. After the financial crisis, the loose monetary policy combined with the volume development of smart phones, the semiconductor industry quickly repaired the previous decline and volume growth, and the demand for mobile solder rose sharply, while the supply of tin mines decreased, and the gap between supply and demand expanded to promote tin prices up 200%.

In the 2016-2018 cycle, the joint production reduction + demand return pushed up the tin price. After a period of several years, the fine tin production increased in 2014, the semiconductor electronics industry developed at a low growth rate, and the tin price retreated. With the downturn in tin prices for many years, in 2016 H1, nine domestic tin smelters jointly reduced production by 17,000 tons, Q3 environmental protection inspectors started production constraints, and demand in the Q4 electronics field began to return. From mid-2018 to the end of 2019, affected by the Sino-US trade war, the semiconductor electronics industry as a whole retreated, and tin prices followed.

From 2020 to the present: tin ore and refined tin supply are tight, the semiconductor industry is back to boom, and the double click of supply and demand makes the tin price suddenly hit a new high again. After 18-19 years of downturn, since September 19, 14 domestic tin smelters have jointly reduced production by 20,200 tons, and Indonesia Tianma has reduced production by about 10,000 tons; Since 2020, COVID has promoted the demand for home office and driven the tin consumption in the electronics field. Supply tightening combined with rising demand, LME continued low inventory prompted tin prices to rise sharply, reaching a record high of $45,105 / ton within two years from April 2020, an increase of more than 200%. In 2022, under the circumstances of weak demand in most end consumption areas caused by the macro environment of Myanmar's storage dumping, tin stocks began to accumulate, and tin prices quickly retreated, with a drop of more than 60% between peak and trough values.

Future outlook: tight supply and demand superimposed cost upward, tin price center is expected to rise. Looking forward to the next 2-3 years, overseas supply disturbance continues, few new tin mining projects, the global tin supply shortage or will be further aggravated, and the electronic field cycle or bottom demand is expected to usher in repair, the fundamentals are gradually improving. ITA forecasts that the full cost of global tin mining will continue to rise, pushing the tin price center to move up. According to ITA, the global cash cost of tin mines in 2022 at 50%, 75% and 90% quantiles is US $11,418 / ton, US $18,534 / ton and US $23,171 / ton, respectively. It is expected that in 2030, the quantiles of 50%, 75% and 90% are 16,625 US dollars/ton, 23,964 US dollars/ton, 36,290 US dollars/ton, respectively.