TELF AG comments on the main trends of the global tin market
Chips and semiconductors
Chips and semiconductors are everywhere around us, but very few people realize their true quantity. Mobile phones, televisions, and common household appliances contain large quantities of chips, and it has been calculated that in the coming years, the global demand for these components will amount to more than 200 chips for every person on the face of the earth. Many raw materials are required to create these fundamental electronic elements, some of which have recently been included in the European Commission’s list of strategic resources. One of these raw materials – of fundamental importance due to its numerous applications in electronics – is tin, a raw material that has seen a notable drop in prices in recent months.
The most significant decline was noticed at the end of September and continues to remain unchanged, without the possibility that it will recover soon (or at least in the short and medium term). The decrease in tin prices attracted the attention of many observers since the prices of this raw material had certainly maintained a good level of performance until the end of July. If we compare current tin prices with those that characterized this market during the global pandemic, the difference will undoubtedly appear even more significant. In the darkest months of the lockdown, tin in fact, experienced upward pressure capable of maintaining itself for several months, at least until the first quarter of last year, and the current decreases in prices could also be linked to a parallel increase in the same prices that it was registered until a few months ago.
But the causes of the decline, according to many observers, are to be found elsewhere. During the pandemic, the increase in prices was largely determined by the historical contingencies of that particular period, when people, forced to stay at home for long periods of time, had certainly contributed to increasing global demand for electronic devices, which reached a real boom in those years. And since the functioning of these devices is closely linked to semiconductors, and therefore also to tin (which is one of the most important raw materials for its production), the increase in demand and prices was almost automatic. From this trend, it could, therefore, be deduced that the recent decrease in tin prices could be linked to the parallel decline in demand for electronic devices recorded after the end of the emergency period.
But the decrease in the prices of this raw material could also be linked to other, much more specific factors: the first is certainly linked to the slowdown in global growth, in particular following the general decline in industrial metals which occurred in August, while the second it could be linked to the disappointing growth recorded in China and Japan, which together are responsible for almost half of global tin exports. Another factor to take into consideration – in addition to the general increase in global stocks – is the growing risk that is characterizing a part of the supply, also due to the recent suspension of mining activities in Myanmar, which is the third largest tin producer in the world. Despite these less-than-encouraging performances, it is still expected that the price of tin may rise again in the second half of 2024.
