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December 30, 2015 | Over the course of the last two years, tin prices found a comfortable spot at the bottom. With no where to go but up, it is time to see what 2016 has in store for the industrial metal. … Read MoreGet Tin Stock Investor Kits
Tin is obtained from the mineral cassiterite. The silvery-white metal is malleable, ductile, not easily oxidized in air and can resist corrosion from distilled water, soft water, tap water and seawater. However, it can be compromised by strong acids, alkalis and acid salts.
Because of its corrosion-resistant properties, tin is often used as a protective coating for other metals, such as lead, zinc and steel. Tin bonds readily to iron, and can also be alloyed with other metals, such as copper, to make bronze or pewter. In addition, tin is commonly used in solders for joining pipes or electric circuits, in bearing alloys and in glass making. Besides those applications, tin is used in the manufacturing of chemical compounds.
In terms of where tin is produced, the US Geological Survey states that in 2014, the world’s top producer was China, which put out an impressive 125,000 MT. It was followed by Indonesia at 84,000 MT and Peru at 23,700 MT. Total world output for the year was 296,000 MT, and world reserves sit at 4.8 million MT.
As of 2012, the world’s top tin-producing company was China’s Yunnan Tin (SZSE:000960), which produced 69,760 MT of refined tin. That’s well in front of second-place Malaysia Smelting (KLSE:SMELT), which produced just 37,792 MT in 2012, and up 24.2 percent from the previous year.
Much has been expected of tin in the last few years, and while 2014 didn’t live up to market watchers’ expectations, 2015 may prove to be the year that the situation changes. Analysts were predicting at the beginning of the year that Indonesia and China would have a harder time mining the metal due to declining ore grades; meanwhile, they saw demand for tin increasing due to expanded use in electronics.
Indeed, Caroline Bain, an economist for London-based consultancy Capital Economics, said at that time, “[t]in should actually be a beneficiary of any rebalancing of the Chinese economy toward more consumption-driven growth, given that its primary use is in consumer electronics.”
Standard Bank also predicted then that tin would perform well in 2015, describing it as having the best outlook of the six main industrial metals on the London Metal Exchange. It said it saw the metal entering a period of deficit through 2016, in comparison to copper, aluminum and zinc, which it anticipated being oversupplied.
“Of all the base metals, we are most bullish on the fundamentals of the tin market, due to structural supply shortages and a lack of enough advanced mining projects to remedy the problem in the foreseeable future,” said one analyst at Standard Bank.
In terms of price, Capital Economics sees the tin price reaching $23,000 per tonne by the end of 2015, then hitting $24,000 per tonne by late 2016.