How to Invest in Tin

Tin Investing
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This brief guide on how to invest in tin covers topics such as supply and demand dynamics, top producers and investment strategies.

After a rough patch of volatility, the tin price has been on a tear since 2020, driven by surging demand from the electronics sector amid a deficit in supply.

That upward pressure in the tin market resulted in highs not seen in a decade, according to Reuters. "Supply tightness and a boom in demand for electronic products, which has driven growth in Asia’s factories, has boosted prices and caused a massive premium for immediate delivery," reported the news agency.

Tin is primarily used to coat other metals due to its ability to retain a high polish and prevent corrosion. Tin is also an alloy metal used in soldering and the production of rare earths superconducting magnets.

Because of its price rise and key uses, interest in tin investing is increasing. To help investors looking to jump into this commodity sector, the Investing News Network has put together a brief guide to tin supply and demand dynamics, as well as an overview of how to start investing in this silvery white metal.

Tin investing: Supply and demand

The tin market has been in deficit for the past decade, and is expected to stay in deficit as demand rises.

Due to its many positive characteristics, there are a slew of important uses for tin. For example, the metal is malleable, ductile and not easily oxidized in air; it’s also lightweight, durable and fairly resistant to corrosion. Those qualities make tin, which is obtained from the mineral cassiterite, a good candidate for use in solder, as well as tinplate, chemicals, brass and bronze and other niche areas.

In terms of where tin is produced, China was the world’s top tin producer in 2021; the country put out 91,000 metric tonnes (MT) of the metal, down 7,000 MT from the previous year. Indonesia is close on China’s heels at 71,000 MT, and third on the list is Peru at 30,000 MT. Total world output for the year was 300,000 MT, up by 36,000 MT from the previous year, and world tin reserves sit at 4.9 million MT.

The world’s top tin-producing companies include China’s Yunnan Tin (SZSE:000960), Indonesia’s PT Timah (IDX:TINS) and Malaysia Smelting (SGX:NPW) in Malaysia.

Like tungsten, tantalum and gold, tin is a conflict mineral. Armed groups in the Democratic Republic of Congo (DRC) earn hundreds of millions of dollars every year by trading these minerals.

Currently, the Dodd-Frank Act in the US requires public companies that source minerals from the DRC to produce independently audited reports about the ownership and source of these mined commodities; these documents must be provided to the US Securities and Exchange Commission.

Tin investing: How to start

As mentioned, investing in tin is becoming more and more appealing as demand for the metal grows. Tin is also interesting for investors because of its ability to serve as a hedge against the US dollar and against inflationary pressures in certain environments.

Those wanting to begin tin investing may want to consider exchange-traded funds (ETFs) and futures. According to CommodityHQ, many ETFs include exposure to tin, generally alongside copper, nickel, lead and aluminum. Tin futures are traded on the London Metal Exchange under the code SN, with contract pricing in US dollars per MT. Clearable currencies include the US dollar, yen, pound and euro.

Of course, tin investing can also be done by buying shares of tin-focused companies. Tin-producing companies may be a good place to start, although investors with more risk tolerance may also want to look at tin explorers.

This is an updated version of an article first published by the Investing News Network in 2019.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.


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