In a new report on the outlook for the tin industry ITRI concludes: “There is a high probability of a tin shortage developing within the next five years, even if growth in usage is slow.”
The industry association calls for an acceleration in investment in all potential sources of new tin supply, including brownfield and greenfield exploration and development, formalisation and management of artisanal and small-scale mining and a boost to recycling. The global market is expected to remain in deficit to 2018 with a cumulative shortfall of over 60,000 tonnes, despite an anticipated slow-down in growth in usage from the current rate of some 2.5% pa to below 1% pa.
Demand has fallen in four of the last six years, although ITRI’s 2013 survey of tin users identified a cyclical resumption of growth in most major applications. After a long period of stability, substitution and economisation threats have re-appeared and accelerated recently, especially in the electronics sector. Looking forward, ITRI sees tin chemicals and energy-related applications taking over the driving role in the expansion of the tin market from solders. Opportunities in energy generation, conservation and storage includes products which are already in commercial production (e.g. maintenance-free lead-acid SLI batteries, catalysts for insulation foam, e-glass coatings) as well as a wide range still at the R&D stage.
Global mine production has amounted to between 280,000tpy and 300,000 tpy in recent years, but is forecast to decline in the short-term and return to only just over 280,000 tonnes in 2018. Declining production from the big two producing countries, China and Indonesia, may be just about offset by new project start-ups elsewhere in the world, but very few of these have so far got past the feasibility study stage. Increased secondary production, currently running at some 60,000 tpy, could also help meet demand.
Leading tin miners like YTC and Minsur are investing heavily in maintaining production from their existing operations, focussing on brownfield exploration and development. In contrast greenfields projects owned mainly by junior miners are generally starved of funds. In a companion report produced with Greenfields Research, ITRI has identified 70 tin mine projects which could potentially start up over the next 15 years or so, but the total capex required is in the order of US$ 8 billion. While a number of advanced projects have a high probability of proceeding, many are disadvantaged by some combination of low grades, technical challenges or high country risk.
The report points out that the forecast cumulative supply shortfall to 2018 is greater than worldwide visible stocks at the start of this year, but that the gap could be filled by a draw-down of unreported stocks held by producers, consumers and traders, notably in China. Currently there is good availability of tin, with uncertainties about global demand, over-supply in China and higher exports from Indonesia. Prices are expected to remain range-bound into the fourth quarter of this year, but could then move sharply higher in the next three to four years.
