The price of tin had a turbulent time in 2020. After plunging in the early part of the year, the tin price has since rebounded to an eight-year high. Strategists at Capital Economics anticipate that a switch in consumer spending away from goods towards services once lockdowns are relaxed, will act as a drag on the price of tin. Thus, tin’s rally is set to fizzle out by end-2021.
Key quotes
“Spending should shift away from tin-intensive electronics and consumer goods and back towards services as economies lift lockdown measures and re-open. This is one reason why we expect a more general slowdown in China’s industrial activity in H2 2021. Accordingly, we expect that growth in China’s tin demand, which we estimate at around 5% in 2020, will ease back this year.”
“Both mine and refined supply will pick up this year, particularly in Indonesia, the world’s second largest refined tin producer. Consequently, output there should be relatively easy to revive in 2021. And elsewhere, we doubt that COVID-19 related shutdowns to production will be repeated this year, which will boost mine supply in South America.”
“We forecast that the tin market’s large deficit will fall significantly this year owing to a rebound in supply and softer growth in demand from China. As a result, we expect the price of tin to end the year at around $17,000 per tonne (from $25,000 currently).”
Share
