The market for tin was estimated to be in deficit for a second consecutive year in 2016 according to Roskill, with the deficit amounting to nearly 4% of consumption in this year or around 14kt sn - up from 11kt sn in 2015. In its new ten-year outlook for tin, Roskill is forecasting that consumption will grow by a cumulative total of 12% to 2017, or 1.1% per year. Falling mine output in some of the world's historically largest mine producers of tin is expected to leave plenty of room for new mining projects to enter the market. Roskill's latest Tin Market Outlook report identifies 21 projects, out of a total of 34 identified greenfield and brownfield expansions, that may reach first production in the next ten years.
On the demand side, tin consumption remains dominated by uses in electronic solders. Driven by consumer demand for smartphones, tablets and other portable electronics, sales figures of tech companies have outperformed most other market segments. As per-capita incomes continue to rise, not only in the industrialised nations of the OECD, but in highly populated emerging economies in Asia and increasingly in Africa, the outlook for demand for consumer electronics appears set to soar further still.
In recent years, tin demand has grown more slowly than growth in consumer electronics sales, as innovative manufacturing and a trend towards ever-greater miniaturisation has led to a reduction in the use of solders. Such improvements in production techniques have been partially offset by the substitution of tin-lead solders by lead-free, high-tin alternatives, which in 2016 accounted for 77% of worldwide solder consumption.
The greatest growth potential for tin is likely to be in automotive battery applications. Most vehicles today (including fully-electric models such as the Chevrolet Bolt) include lead-acid batteries to assist with starting, lighting and ignition functions and lead-acid batteries are also used to provide motive power and in industrial applications. The inclusion of tin has permitted the development of maintenance-free, valve-regulated lead acid (VRLA) batteries, which have gained rapid market share. In 2016, the use of tin in lead-acid batteries approached 30kt. Supported by further growth in vehicles sales to an estimated 115M sales by 2027 and the further substitution of antimony, the use of tin in this application is expected to exceed 50kt by 2027.
Despite the potential upside to tin demand, tin prices have largely been supported not by rising consumption but by declining production. Low prices in 2015 and early 2016 combined with an uncertain investment climate have meant that many producers have been unable or unwilling to invest in exploration, developing new tin mines or investing in existing operations. Production from primary sources is estimated to have fallen in 2016 in China, Indonesia, Malaysia and Peru, with similar decreases in secondary production in the USA and Belgium.
The exception has been in Myanmar where producers have become the leading suppliers of concentrates in the world. Estimated tin-in-concentrate production in Myanmar rose from 12.8kt in 2013 to 50kt in 2016, virtually all of which is exported to neighbouring China. Exports were supported by government stocks and an investment in processing capacity, which enabled more processing of above-ground stocks. Mine production in Myanmar is expected to have peaked because of declining grades and increasing costs as operations move underground.
Concentrate production in Indonesia, Peru and Bolivia may rise in the future, being highly sensitive to prices. The depletion of Indonesian resources has increased production costs that are already some of the highest in the world. In Peru, production by Minsur has been in long-term decline as grades have fallen. Minsur also intends to increase production from its Pitinga operation in Brazil, where output reached record levels in 2016 and is expected to rise further in 2017. In the longer term, Comibol in Bolivia plans to increase concentrate production by more than 20ktpy by 2025.
Elsewhere, there are a number of other tin projects at various stages of development. With the increase in prices of tin in 2016, several of these may now be fast-tracked into production. Advanced projects include Alphamin Resources' Bisie project in the DRC, Kasbah Resources' Achmmach project in Morocco, the Cleveland tailings, open pit and underground project by Elementos in Australia, and Syrymbet in Kazakhstan. Several of these projects may reach first production in the next five years.
Together with other projects identified in Roskill's report, new operations could contribute up to 74kt tin-in-concentrate capacity by 2027, although Roskill expects the actual amount that will be added to be considerably less than that, providing continued support to prices.
Roskill's new market outlook also provides insight into dynamics into the ever-volatile Chinese market, changing costs of production, and the various risks to supply, demand and prices.
Roskill will soon be publishing its new Tin: Global Industry, Markets & Outlook, with forecasts out to 2027. It is essential reading for anyone requiring a comprehensive overview of this sector. Clickhere for further information or to download the brochure.