African Mining Circle, September 27th: According to Reuters, due to the recovery in demand for electronic products, metal inventories in China's major consumer markets have risen, and prices will continue to rise next year.
Most of tin (accounting for nearly half of the demand) is used for solder, mainly for connecting parts in the electronics industry.
In March of this year, the benchmark price of tin on the London Metal Exchange (LME) fell to US$12,700 per ton, the lowest level in more than 10 years. The reason was that the coronavirus outbreak hit demand, but by early September, the price of tin had rebounded. 45%, which is largely due to China’s recovery.
Since then, due to the increase in COVID-19 cases, the price of gold, along with other metals and the stock market, has fallen to around US$17,500, but analysts expect the price of gold to rise further later this year or early 2021.
Roskill analyst Adam Slade said in a webinar this week: "Due to the recovery in demand, the supply gap in the tin market will last at least until 2023. In our basic situation, prices will be in the short term due to the continuing deficit. Back to around $20,000 per ton."
Due to factory closures, demand has been hit, but supply has also declined. In the first half of this year, Indonesia’s main miner PT Timah’s output fell by 26%.
In recent months, the electronics industry has recovered, and global semiconductor sales in July increased by 4.9% year-on-year.
Roskill predicts that global consumer electronics shipments will increase by 22% in 2021.
Strong demand, financial arbitrage and declining supply have boosted China's refined tin imports, with exports in the first seven months of this year 11 times higher than the same period in 2019.
Macquarie said in a report that buying from China and rising demand in other regions will lead to market deficits. "We have found enough reasons to adjust the balance of supply and demand to increase some inventories this year and next. The resulting deficit appears to be beneficial to tin prices in the next few years."
