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After setting a new price record above $34,000 (“Tin Prices Set New Record”, Trends Journal, 20 July 2021), tin prices closed last week still in record territory as fears of impending shortages persisted.
Tin’s price has shot up 70 percent this year and 9 percent in this month alone.
Tin is essential in everything from making circuit boards to coating steel cans to keep them from rusting. A shortage could cripple a range of essential manufacturing, so users are struggling to lock down future supplies, bidding up prices in the process.
Demand for tin could rise even more in the future as 5G and the renewable energy industry blossom, some speculators have said, according to The Wall Street Journal.
Current supplies face a range of obstacles:
- Myanmar, a major tin producer, is being roiled by social and political unrest;
- Indonesia, Malaysia, and Rwanda, key tin sources, are beset by a new wave of COVID infections, shutting down mines, processing, and shipping operations;
- China, a major center for processing tin ore, has experienced record flooding that has disrupted shipping, while heat waves have overtaxed the electrical grid, leading utilities to turn off power to several industrial users.
“You’re going to book tin from four different suppliers, hoping that one will deliver on time,” consultant Edward Meir with ED&F Man Capital Markets told the WSJ.
Mining companies are reluctant to invest in new production ventures and equipment in case today’s strong market weakens, leaving the world with another glut of tin that tanks prices, the WSJ reported.
Soaring prices of tin, copper, and other metals have pushed up share prices of the iShares MSCI Global Metals & Mining Producers exchange-traded fund by 20 percent so far this year.
TREND FORECAST: The scarcity of tin, copper, and other essential industrial metals will ripple through the economy, keep up inflationary pressures, and hobble the economic recovery. (See “Commodities Supercycle Underway?,” Trends Journal, 11 May 2021.)
If the global shortages give any nation an advantage, it would be China.
In addition to having domestic supplies of many minerals and few environmental regulations hobbling mining or processing operations, China has established economic and political relationships with many developing nations that supply these materials.
As those countries feel the pinch of mounting debt (see related story in this issue), they will be glad to do business with a country that has befriended them in the past.