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Malaysia Smelting Corp: A company involved in tin mining and tin smelting.

Tin Market Outlook

Every once in a while, a previously underappreciated metal rises to prominent. It can be the result of

·         New technology

·         Changing preference

·         Supply Constraint

·         Skyrocketing demand

Application of tin

·         Soldering for electronics industry

·         Tin chemicals is largely used in PVC stabilisers, where application such as roofing, windows profiles and bottles where the tin prevents the PVC from degrading in heat and light. It is also the most price sensitive application

·         Tin is used in food cans where tinplate are generally used in packaging for paint, edible oils or dry food.

·         Lead-acid batteries are a relatively new market for tin but set to become the fourth largest single use of tin over the next decade. Tin is added into battery grids, connectors and some electrolyte formulations. Rapid growth markets are in e-bikes internet cloud storage backup, hybrid cars and alternative energy. China policy to replace cadmium and antimony based products with tin alternatives has led to a tremendous growth for tin use in lead-acid batteries.

·         Others: Glass coating, alloy, catalyst, dental product, pharmaceuticals and chromium passivation in cement. A revival in wine and spirit packaged in tin bottle/capsule are growing popularity in Europe

Consumption

The world demand for tin runs at roughly 340,000 tonnes per year. China (147,000), Japan (25,500) and USA (30,000) are the major consumption countries

Future

·         Solders in electronics today are experiencing a conversion to lead-free. Completion of the lead-free solder transition in China and the rest of the world could represent an additional consumption of more than 20,000 tonnes per annum (tpa) of tin.

·         Fire retardants: Tin-based fire-retardant products such as zinc stannates have been used in polymers for some years but market growth has always been restricted by price competition from antimony trioxide. However, the price gap is narrowing significantly and antimony trioxide is coming under some environmental pressure

·         Brake pads: Tin sulphide is now being marketed as effective replacement for antimony sulphide in vehicle brake pad.

·         Stainless Steel: Tin is expected to replace chromium and some nickel in this application for stainless steel as it gives better corrosion resistance and better formability. Nippon Steel, Japan is the pioneer in this field and this application will increase an extra demand of 15,000 tpa of tin consumption

·         Lithium ion batteries: Conventional technology uses carbon as an electrode in batteries. Adding tin to lithium-ion battery electrodes can increase capacity by 4 times. With the ever growing demand of electronic products and electric vehicle, successful implementation of tin technologies in lithium ion batteries could result in at least 17,000 tpa new tin use

·         Solar cell: A 30% tin-content material, kesterite is the new generation material for solar cell replacing conventional rare earth material which are expensive. Future market for alternative energy such as solar cells are huge and we will need the equivalent of one new nuclear power station every other day by 2050.

·         Fuel cell: Tin has shown excellent performance for being a catalytic material in ethanol fuel cells. Demand is expected to grow from 2020 where liquid tin anodes are installed for large biomass or coal power generation plants.

·         Fuel catalyst: Fuel catalyst based on tin alloy pellets are added into vehicle fuel tanks, saving up to 10% of fuel and reduce emission of up to 59%. This can also be used in power generators, marine and boiler applications

·         Anti-microbial healthcare: Tin and zinc fluoride combinations are highly effective anti-viral and wound-healing agents.

·         Laser: New electronic materials such as germanium-tin for lasers have recently attracted attention for use in photonics where light beams will replace copper to transfer data much faster in the future.

·         Unlimited potential: Stannene, a single atomic layer of tin is the only material to theoretically conduct electricity at 100% efficiency, with better performance than today superstar material graphine. No application has used this technic but it lead humanity to boundless imagination.

In short, the future and green economy runs on tin

Production

The world produces a roughly 330,000 tonnes of tin per year with China (154,000), Indonesia (64,000), Malaysia (29,000) and Peru (20,000) the major producer. Recently, Myanmar has increase its production significantly (More than 10,000 increase in FY 2015)

Supply Deficit

·         China tin production has fallen by over 10% over the last 2 years. Most private mines in Yunnan has been closed and some high cost operation have also been shut. Southern Mines operation in Hunan, run by the third largest tin mining company in China, has been closed in June 2015 due to environmental problem. As a result, China smelters had relied heavily on imported tin concentrate as raw material.

·         Indonesia export regulation come into place in Sept 2013, where refined tin was required to meet higher quality standards and to be trade through Indonesia Commodity and Derivatives Exchange (ICDX) prior to export. In Aug 2015, Indonesia seeks to further control supply by placing greater scrutiny on mining leases and production plan. This could theoretically restrict purchases of ore from illegal small scale miner if implemented strictly.

Unlike corn or oil, most government don’t have strategic stock pile for tin and we had seen a decreasing world stock ratio (Weeks of consumption), where the consumption rate in 2009 takes 7.4 weeks to use up the inventory decrease to 3 weeks in year 2016.

Threat

·         Miniaturisation of electronics means some solder joints are becoming very small. Besides, circuit board design is also changing, where solderless assembly if developed cost-effectively, solder use in electronics could be significantly reduced

·         Research is underway to reduce tin use in tin plate while Low Tin Steel (LTS) products already exist in Japan.

·         Tin Free Steel (TFS) represent a significant proportion of steel packaging in Japan where tin was replaced by chromium

·         Tin chemical facing a strong environmental pressure in Europe

Conclusion

Although tin price has been rising, it is nowhere at all-time high and we believe tin will be the metal of the decade