Tight supply pushes tin prices to highest since 2014

LONDON: Tin rose to its highest since 2014 on Monday after a shortfall of the metal used in solder to connect components in electronic devices pushed up price for 12 straight weeks.

The premium on the London Metal Exchange (LME) for tin that can be quickly delivered has ballooned as stockpiles in the exchange's warehouse system near record lows.

Benchmark LME tin was up 2% at $22,400 a tonne at 1158 GMT after reaching $22,575. Prices are up 10% this year after rising 18% in 2020.

"There's a mismatch of supply and demand, a shortfall that will continue," said independent analyst Robin Bhar.

A price of around $25,000 a tonne is needed to incentivise supply to meet demand that will expand to feed industries such as internet infrastructure, consumer electronics, renewable power and electric vehicles, he said.

"I suspect it goes up very quickly, overshoots then consolidates," he said.

DEFICIT: The roughly 350,000 tonne a year tin market will see a deficit of 2,700 tonnes in 2021 after a 5,200 tonne shortfall in 2020, the International Tin Association said in December.

DEMAND: Around half of tin demand is for solder.

LME STOCKS: Tin inventories in LME-registered warehouses have fallen to 1,045 tonnes from more than 5,000 tonnes in October.

SPREAD: Cash tin on the LME was at a $420-a-tonne premium to the three-month contract, indicating tight nearby supplies. The premium hit $553 a tonne on Jan. 21, the biggest since 2009.

SHFE STOCKS: Inventories in warehouses registered with the Shanghai Futures Exchange at 5,084 tonnes have risen from around 3,000 tonnes in October, but fell last week.

MARKETS: Global shares rose to near record levels as optimism over a $1.9 trillion US stimulus plan outweighed rising COVID-19 cases and delays in vaccine supplies.

OTHER METALS: LME copper was down 0.1% at $7,993 a tone, aluminium rose 0.7% to $2,008 a tonne, zinc gained 0.1% to $2,717.50, nickel added 0.2% to $18,305 and lead was 1% higher at $2,066.