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Due to seasonality and the novel coronavirus epidemic, tin supplies are tight, inventories are at historic lows and demand is strong, which are expected to help push tin prices closer to record highs, the foreign news reported on December 20.
Tin for (LME) delivery on the London Metal Exchange has doubled this year, hitting a record high of $40680 a tonne last month as consumers scrambled to snap up the solder metal used in semiconductors.
World semiconductor trade statistics (World Semiconductor Trade Statistic) predicts that global semiconductor demand will grow by 25.6% this year and 8.8% next year, and the market size will reach US $601 billion.
The International Tin Association (ITA) estimates a shortage in the tin market, with a difference of 18000 tons between tin production and consumption.
Given that inventories help reduce shortages, the gap in the global market is likely to remain at 9000 tonnes.
"seasonal rainfall in Indonesia at this time of year usually means a decline in production," said James Willoughby, an analyst at ITA.
Disruptions caused by the COVID-19 outbreak include the closure of the border with Myanmar, China's suspension of imports of tin concentrates, and production cuts by Malaysian smelters.
Macquarie analysts said in a report: "to avoid structural deficits and the complete depletion of global ground stocks, we need to increase the size of brown fields or the emergence of new sources of supply that have not yet been balanced."
Tin stocks in LME warehouses have climbed to 1755 tonnes in recent weeks, but remain at an all-time low.
"there is no evidence that tin supply will ease significantly in the short term," said Tom Mulqueen, an analyst at Amalgamated Metal Trading.
Shipping disruptions also mean that tin is paying a high premium on the spot market, higher than the LME benchmark contract, especially for consumers in the US and Europe.
"Solder is one of the most important industries for tin demand and plays an important role in electronics, suggesting that tin is one of the metals critical to future technology," said Michael Widmer, an analyst at BoA Securities.
