ITRI’s latest detailed review of industry prospects concludes that there are still strong reasons to expect historically high tin prices three to four years ahead. Global demand should be around 400,000 metric tons per year (mt/y) by 2015, mineral resources at existing operations are being depleted and production costs are expected to rise considerably. However, in the immediate future the global economy faces downside risks, so the short-term outlook is uncertain.

World refined tin usage surged to an all-time peak of more than 370,000 mt in 2007, powered mainly by the rapid industrialization of China, a global boom in consumer electronics, and a rapid transition to the use of lead-free solders. Over the next decade technological changes offer major threats and opportunities. The biggest risks are in the current main applications of electronics solders and tinplate, where miniaturization, new assembly technologies and lower coating weights could cut usage. Offsetting this are positive prospects for new applications in tin chemicals and energy-related technologies such as lithium ion batteries and steel alloys. Technology change should be positive for tin use, making a net addition on the order of 15,000 mt/y or 4%-5% to world consumption over five to 10 years.

World production of refined tin has been fairly stable around 350,000 mt/y in recent years, dipping in 2008-2009 in line with the fall in world usage as a result of the global financial crisis. Meanwhile mine production, having peaked at some 325,000 mt in 2005, has been declining. The growing gap between mine and refined tin production, especially in China, has been filled by increased secondary refined tin production, which exceeded 60,000 mt for the first time in 2010.

Tin mining is very concentrated geographically, with two-thirds or more of production coming from China and Indonesia. Production in both of these countries has been declining or at best stable and these downward trends are forecast to continue.

ITRI and Greenfields Research have recently completed a two year project to build a ‘Tin Production Costs Model,’ which helps identify the parameters of the future tin price range. The floor price of tin—identified by marginal cash operating costs—is rising rapidly, due mainly to falling grades at Indonesian alluvial operations, while the high capital costs of replacement hard-rock mining capacity also push up the long-term industry equilibrium price.

The report identifies a pipeline of some 60 new mine projects with a combined potential capacity of more than 100,000 mt/y of tin-in-concentrate, which could come on stream in the next five to 10 years.