Tin prices, which have rallied in recent months to near two-year highs, could see further support and potential gains in the coming months, according to analysts. The key factors driving this outlook include ongoing supply disruptions, the impact of geopolitical conflicts, the possibility of interest rate cuts leading to fund inflows, and stabilizing demand.
Benchmark three-month tin on the London Metal Exchange has hit $36,050 per metric ton in April, a surge of 31% so far this year, making it the best performing base metal. This rally has been propelled by production problems in major tin-producing regions like Myanmar, Indonesia, and the Democratic Republic of Congo, which together accounted for 43% of global tin mine production in 2023.
Analysts suggest that the resumption of tin mining operations in Myanmar’s Wa State remains uncertain within the next six months, while Indonesia’s export volumes may not fully make up for the delays in export permits experienced in the first two months of the year.
Looking ahead, tin prices may see “extreme increases” in the second half of the year, potentially reaching as high as $38,000 per ton, according to Guo Ning, the secretary-general of the China Nonferrous Metals Industry Association (CNIA). This forecast is driven by macroeconomic factors, including the potential for interest rate cuts that could lead to increased fund inflows into the sector as a hedge against inflation.
Additionally, analysts project that long-term tin exports from Indonesia will likely decline as the country reserves more metal for use in its domestic downstream sectors. China’s tin production is expected to reach 216,000 tons in 2024, while consumption could hit 226,000 tons, further tightening the global tin market.
Overall, the combination of supply risks, geopolitical tensions, the prospect of interest rate cuts, and stabilizing demand are expected to provide continued support and the potential for further gains in tin prices in the coming months.