Market research firm BMI, a Fitch Solutions company, has slightly raised its tin price forecasts for the year from an average of $25 000/t previously to $25 700/t.  

This adjustment was driven by global semiconductor sales appearing to have reached a trough, indicating rising demand for tin, the company said in a market commentary published on November 6, noting that global supplies had simultaneously tightened over the course of the year.   

As of October 23, three-month tin futures prices on the London Metals Exchange lingered at about $24 985/t, with the year-to-date average now at $26 205/t.  

BMI's price forecast for the year implied an expectation for prices to remain at about $25 000/t over November and December.  

Looking ahead to next year, BMI's forecast projects a price of $28 000/t, suggesting that prices will increase in the coming months. 

BMI anticipates the market surplus to grow next year as global production, primarily from mainland China and Malaysia, outpaces demand. However, Myanmar's tin mining ban, coupled with easing inflation that will boost demand growth, is projected to lead to market tightening over the next few years. 

In the longer term, BMI expects demand to remain strong. On the supply side, a limited pipeline of tin mining projects will tighten the tin concentrate market, increasing competition among smelters and constraining ore feed for refined output growth. 

On the demand side, the global use of tin is expected to rapidly increase owing to its use in electronics, especially as electric vehicles contain greater amounts of electronics in their design, and in solar panels, specifically in photovoltaic cells. BMI said this cemented tin's status as a commodity of the future, ultimately leading to a tightened market. As such, BMI foresaw a market deficit by 2030. 

In terms of production, BMI forecasts that global refined tin production will increase by 1.4% year-on-year this year. The expectation is for continued supply growth during the year, with new projects in Peru and Malaysia realising a full year of output. Some low base effects are expected to remain after refined output was significantly impacted by Covid-19 in Indonesia, Peru and Bolivia.  

However, the company said that production growth would likely slow in the longer term owing to environmental restrictions in China, Malaysia and Indonesia, limiting the pipeline of tin mining and smelting projects.  

Environmental policy in Indonesia, in particular, presented vulnerabilities to production growth as tin producer PT Timah focused its expansion plans on offshore mining, facing opposition from coastal communities in the country.    

BMI expected rising demand for tin entering 2024 as inflation levels have started easing and global semiconductor sales have begun to pick up.  

On October 19, the world's largest contract chipmaker Taiwan Semiconductor Manufacturing (TSM) announced during its third-quarter earnings report that it had been observing early signs of demand stabilisation in the personal computer and smartphone market.  

TSM manufactures semiconductors for clients such as Apple, AMD, Qualcomm and Nvidia, believing the semiconductor industry is close to a bottom and about to enter the next cyclical upturn. 

For mainland China this year, BMI expects a more pronounced year-on-year surge in the consumer electronics device market since the zero-Covid-19 strategy has ended. Consumer expenditure, high street sales and online trade avenues have been bolstering purchases.  

Given escalating US-China tech tensions, the Beijing government is expected to continue investing in a domestic chip manufacturing industry to reduce reliance on foreign sources of integrated circuits.  

In Japan, key elements of the semiconductor strategy this year involved strengthening domestic manufacturing capability and fostering research and development for next-generation semiconductor technology through international collaboration. 

Consequently, BMI has revised its forecast for global refined tin consumption, projecting growth of 2.3% year-on-year this year and 2.4% year-on-year in 2024.