ITRI view on tin supply/demand position
Release date: 29 Apr 2009
itri.co.uk
At its six-monthly Board meeting last week, ITRI members considered the short-term outlook for world tin supply and demand. The market is expected to be in surplus by 5,000 – 10,000 tonnes in 2009 as a result of the sharp decline in world consumption caused by the global economic crisis from the fourth quarter of 2008. However the size of the surplus has been limited by rapid supply cut-backs, while downward pressure on prices has been eased by provincial government stock financing initiatives in China. Meanwhile the credit crunch and much lower prices (compared to last year’s peak of over $25,000/tonne) is causing a major reduction in investment in new mine capacity.
ITRI estimates that world tin usage in 2009 will fall to around 300,000 tonnes, well below the record levels of some 360,000 tpy reached in 2006 and 2007. However after six months of very poor demand, we expect some recovery over the rest of this year. Tin is less exposed to the troubled automotive and construction industries than most other metals, although it has been hit by lower demand and de-stocking in the important consumer electronics sector. Tinplate demand is stable or growing.
Tin production also fell sharply from the fourth quarter of 2008, with particularly large cut-backs (over 40% year-on-year) seen in China in the early months of this year. Although small-scale and artisanal mines will continue to operate at current prices, investment in sustainable mining projects worldwide will be greatly curtailed.
ITRI’s analysis of over 20 potential hard-rock mining projects – with a combined resource of over one million tonnes of contained tin - shows an average grade of less than 0.4% tin. As a result very few are currently economically viable. At the same time exploration activity to identify new resources is also likely to be restricted. Thus an eventual post-recession recovery in tin consumption could encounter significant supply constraints. |
