TIN is trading close to all-time highs despite improving supply conditions, as speculative investors continue to price in long-term scarcity fears rather than near-term market fundamentals, said Reuters in an analysis of the metal’s prospects.
LME three-month tin stands at $55,225 per ton, just below January’s record of $59,040, and is up 36% since the start of the year – the best performance among base metals, ahead of aluminium’s 23% gain.
The rally sits uneasily with the supply picture, the newswire said. Global mine production is forecast to grow 8.7% this year, according to the International Tin Association, with Myanmar’s Man Maw mine gradually resuming output and Congo’s Bisie mine stable. LME stocks have risen 60% since January to 8,660 tons, and time-spreads are in comfortable contango, signalling no immediate shortage.
Yet speculative activity remains intense, particularly in Shanghai, where daily tin futures volumes have averaged 345,000 contracts this month, equivalent to the entire global refined tin market changing hands every day. Options volumes have more than doubled year-on-year.
Tin has been swept up in the “internet metals” trade alongside silver and copper – so named because all three are essential to digital infrastructure and face long-term structural supply uncertainty. The concentration of tin mining in frontier jurisdictions such as the Democratic Republic of Congo and Myanmar’s Wa State underpins the scarcity argument, said Reuters.
Consumption is forecast to fall 0.7% this year as Chinese solar installations slow and high prices dampen electronics demand – but so far, the bearish fundamentals have failed to break the bullish narrative, the newswire said.
