Tin Market Faces Supply Challenges Amid Growing Energy Transition Demand

• Tin had a volatile year in 2024 with supply disruptions in Indonesia balanced by weakened demand
• Tin faces a potential medium-term supply deficit by 2030 due to limited new mining projects and increased usage in the energy transition
• Indonesia aims to move downstream in tin production but faces challenges in developing end-use industries
• Europe and the West are looking to diversify tin supply chains away from concentrated production in Asia
• Tin prices could face short-term volatility in 2025 but the long-term outlook is bullish on rising demand and supply risks

While often overlooked compared to other energy transition metals like lithium and cobalt, tin is poised to play an increasingly critical role in the coming years. As a key component in solders for electronics and coatings for solar panels, tin demand is set to rise alongside the global shift to electrification and renewable energy. At the same time, tin faces mounting supply risks due to high geographic concentration, limited investment in new mining projects, and resource nationalization trends in key producing countries.

Tin's Critical Role in the Energy Transition 

Tin's primary use today is in solders for joining and connecting electronic components in everything from consumer electronics to electric vehicles and renewable energy infrastructure. Tin is also used in coatings for solar panels and as an alloy for lead-acid batteries. As the world electrifies and decarbonizes in the coming years, demand for tin in these energy transition applications is forecast to grow significantly. Tim Moody, CEO of Pan Global Resources, explains:

"The demand for tin is looking better. Given the energy transition and the increased demand that's going to bring for not only copper but also for tin...whether it be for coatings on solar panels or just as the solder which is the main industry for connecting everything electrical."

The International Tin Association projects that the tin market could face a supply deficit of 13,000 tons by 2030 without additional investment in new mining projects. This structural supply gap is underpinned by robust demand growth forecasts of 2-3% annually through 2030 across tin's end-use markets.

Indonesia's Downstream Ambitions Pose Supply Risks 

On the supply side, the tin market faces rising policy risks as key producing countries look to capture more downstream value. Indonesia, one of the world's top 3 refined tin producers, has laid out ambitions to restrict raw material exports and force more domestic downstream processing and manufacturing activity. The policy parallels Indonesia's highly disruptive ban on nickel ore exports implemented in 2020. Andy Home, senior metals columnist at Reuters, states:

"We should take Indonesia very seriously in its ambitions to drive its tin sector downstream into value added products. We've seen what it's done in nickel...the political will is there."

However, Home noted that unlike nickel which has clear processing pathways, Indonesia faces challenges in developing downstream tin industries given tin's specialized electronics end-uses. Nonetheless, Indonesia's track record of aggressive resource nationalism poses a significant overhang for the tin market.

Battery Show with Tim Moody, President & CEO of Pan Global Resources and Andy Home, Senior Metals Columnist at Reuters

Myanmar Emerges as a Crucial Swing Supplier 

The other key supply wildcard is Myanmar, which has rapidly emerged among world’s top tin producers and a crucial supplier of concentrate exports to China. However, ongoing civil unrest following Myanmar's February 2021 military coup has injected considerable uncertainty into the tin market.

"The Myanmar situation has not changed to the best of anyone's knowledge - there is still a ban on new mining at what is one of the world's largest tin deposits. Nothing changes there at all."

China, as the main buyer of Myanmar's tin concentrate, is starting to feel the impact of constrained raw material availability according to Home. Visible inventories of tin on the Shanghai Futures Exchange have fallen from over 20,000 tons in early 2024 to just 6,000-7,000 tons currently. China has also notably flipped to being a net importer of refined tin in recent months.

Europe Waking Up to Critical Mineral Security 

The rising supply risks around Southeast Asian producers is driving a new focus on tin security in the West, especially Europe which relies on tin imports. The European Union is evaluating adding tin to its critical minerals list and emphasizing the need to build more resilient supply chains. Moody, whose company is advancing a copper-gold-tin project in Spain, says:

"When we hopefully come to producing tin in the future, we'll be pushing an open door. Having a tin project in Europe is somewhat unique and advantageous...Europe relies on importing tin, apart from its recycling industry which is an important component, but has to import just about all of its tin."

For EU policymakers, the priority is not just developing more domestic mine supply but also rebuilding downstream processing and refining capacity. While Europe has some latent tin smelting capacity, more investment is needed to reduce reliance on Chinese refiners.

Substitution Risks Blunted by Miniaturization 

One perennial risk facing the tin market is the threat of substitution, especially by lower cost alternatives like aluminum in the canning industry. However, the electronics industry's steady march towards miniaturization is making tin increasingly hard to substitute in its core solder applications.

As electronics get smaller and more complex, manufacturers need to pack more computing power into less space while maintaining the same reliability standards. This is driving the adoption of advanced soldering materials with high tin content and ultra-fine pitches. While there are some potential alternatives based on electrically conductive adhesives, their high costs make widespread substitution unlikely in the medium-term.

Near-Term Price Volatility Creates Opportunities 

Heading into 2025, tin prices face several near-term crosscurrents that could fuel ongoing volatility. On the downside, China's reopening has gotten off to a sluggish start, weighing on investor sentiment towards industrial metals. The potential for recession in developed markets is also curbing demand from tin's core electronics end-markets.

However, supply-side factors are likely to be a more dominant driver for tin prices in 2025 as the market digests the impacts of Myanmar's mining ban and Indonesia's smelter shakeup. Prices are likely to be highly sensitive to the drawdown of China's domestic inventories and import flows given the country's outsized influence. Home says:

"It could be ironic that just as the funds have slightly given up on tin, the reality of what they were trying to capture may actually unfold in the next few months." 

The Investment Thesis for Tin

• Tin demand poised to rise 2-3% annually through 2030 driven by electronics growth and clean energy transition
• Market faces a 13,000 ton structural supply deficit by 2030 without significant new mine investment
• Indonesia and Myanmar supply disruptions are likely to tighten the market and draw down global inventories
• Prices are at cyclical lows and have historically been very volatile, creating opportunities for investors
• Rising resource nationalism is spurring a race to secure ex-China supply, especially in the U.S. and Europe

The fundamental outlook for tin through 2030 presents a compelling investment case, characterized by steady demand growth from electronics and energy transition applications alongside mounting supply-side risks from key producers like Indonesia and Myanmar. Companies like Pan Global Resources, advancing its Spanish copper-gold-tin project, are well-positioned to benefit from this market dynamic. As CEO Tim Moody notes, developing a tin project in Europe represents a unique strategic advantage given the continent's near-total reliance on imports and growing focus on supply chain security.

The evolving geopolitical landscape surrounding critical minerals could prove particularly advantageous for Western tin developers like Pan Global Resources. As Europe and other regions seek to reduce their dependence on Asian supply chains, projects in politically stable jurisdictions that can serve regional markets are likely to command a premium. While the tin market may face continued volatility in the near term, the projected 13,000-ton supply deficit by 2030 and limited substitution risks in key applications suggest strong fundamentals for both the metal and well-positioned mining companies looking to fill the supply gap.