Tin prices will continue to rise thanks to Indonesia’s export ban policy

Tin prices are expected to continue rising in the coming weeks amid uncertainty surrounding a proposed ban on the export of metals from Indonesia, the world’s largest producer of refined tin.

The price of metal used in coating steel cans and electronic welding topped $ 40,000 per tonne on Wednesday, hitting a daily high of $ 40,300 per tonne following news from Indonesia seeking to ban metal exports in the foreseeable future, Fitch Solutions said in a note. Thursday.

President Joko Widodo plans to stop the exports of raw materials. After a ban on nickel ore, the country plans to phase out exports of raw bauxite, copper, tin and other commodities, Indonesian news site Tempo.co reported on Wednesday.

Ban on the export of refined tin

“As Indonesia already banned exports of unprocessed tin in 2018, with the requirement that tin can only be sold in its refined form with at least 95% content, it is not clear to what extent the country will adopt in the future, ”the company said.

Fitch said that as Indonesia currently exports only refined tin, the likely regulation would be to ban exports of refined tin, which would cause a severe shortage of refined tin in the maritime market.

According to Fitch estimates, Indonesia is the world’s largest exporter of refined tin and the second largest producer after China, accounting for 20.4% of global production in 2021.

Strong upward trend

Fitch revised its tin price forecast for 2021 and 2022 upwards to $ 30,500 / tonne and $ 32,500 / tonne respectively, from $ 28,000 / tonne and $ 26,000 / tonne previously to take into account the surge in prices that have reached record highs since the start of the year.

“The slowness with which the global supply of tin recovered from the Covid-19 pandemic has been considerably exceeded by the rapid recovery in demand, especially as tin is used in electronics.” , Fitch said.

The electronics industry has seen a massive increase in demand during the Covid-19 pandemic due to increased sales of medical equipment as well as home equipment and personal devices.

Tight supply

Since 2020, the price of silver metal has followed a strong upward trend due to severe supply tension resulting from Covid-19 lockdowns, particularly in major tin-producing countries Malaysia and the United States. Indonesia, which have yet to meet demand despite a slow slowdown. Indonesia and Malaysia together account for 30% of global refined tin production in 2020.

An electricity shortage in China has skyrocketed demand for tin, as tin solder is an important part of photovoltaic cells, which are the main components of a solar panel.

“Longer term, we expect tin prices to remain on a firm uptrend over the next decade,” Fitch said.

While prices will decline slightly from spot levels in 2022, Fitch expects them to remain historically high and increase slightly by 2030. The company predicts that demand for tin will continue to exceed supply, pushing the market into a deficit by 2026.

Read more: Precious metals rise against inflation, copper at one-month high

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