Supply-chain fragility sends tin soaring to new highs: Andy Home

A New Year and a new record high for the tin price.

London Metal Exchange (LME) three-month tin CMSN3 hit its latest milestone of $44,200 per tonne on Jan. 21 before suffering a bout of vertigo at the start of this week.

It has since regained its bull composure, last trading around $42,500, still more than double the price this time last year. Cash metal continues to command a hefty additional premium.

Tin is experiencing scarcity pricing, having been in the grip of a prolonged supply-chain crunch since the start of the coronavirus. Lockdowns boosted demand for home electronics, all containing tin solder, and simultaneously disrupted a small, globally concentrated supply base.

The resulting squeeze on availability has generated unprecedented degrees of tightness both on the LME and in the physical market.

This should be the year that the supply chain starts to heal but it could be a slow and painful process.

INDONESIAN DELAYS RATTLE MARKET

The latest price highs were triggered by news that Indonesia, the world’s largest tin exporter, is delaying new export permits due to administrative problems.

This is not the first time Indonesian bureaucracy has disrupted tin shipments but it is currently threatening one of the few potential sources of significant extra supply this year.

Indonesia lifted exports incrementally over the course of 2021 as operators recovered from COVID-19 impacts and the price incentive grew ever larger.

Full-year shipments were 74,674 tonnes, up 14% on 2020 and the highest annual total since 2018.
Source: Reuters