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Tin’s 2024 Rollercoaster: From Bullish Heights to Bearish Lows

Tin’s Rollercoaster Ride in 2024: Falling Prices, Persistent Supply Challenges, and a Cloudy Outlook

•• 3 Min
Tin’s 2024 Rollercoaster: From Bullish Heights to Bearish Lows

Tin’s journey through 2024 was nothing short of turbulent. Once the darling of the London Metal Exchange (LME) with staggering year-to-date gains of over 40% in both April and July, tin closed the year with a muted 15% annual gain. While it remained the top performer among LME metals, the narrow margin over zinc symbolized lost momentum. Investors had hoped for another rally reminiscent of the 2022 surge, but tin never revisited its peak, leaving the market to grapple with persistent supply and demand challenges.

The Rise and Fall of Tin’s 2024 Performance

Tin entered 2024 on a high note, fueled by supply constraints in Indonesia and Myanmar. By April, prices reached $36,050 per ton, igniting optimism among bullish investors. However, demand-side weaknesses began to overshadow supply concerns, leading to sharp price corrections by year’s end.

Initially, investor enthusiasm was palpable. By the end of Q3, funds held a net long position of 3,319 contracts—the largest bullish stance since 2018. Yet, by December, net longs plummeted to just 521 contracts. Frustration among bullish investors, coupled with growing demand uncertainties, caused this retreat.

Demand Woes: The Achilles’ Heel of Tin

Despite constrained supply, tin stocks at major exchanges remained unexpectedly high. The Shanghai Futures Exchange (ShFE) recorded an all-time high of 17,818 tons in May. This anomaly puzzled analysts until October, when the International Tin Association (ITA) revealed the full extent of a demand slump.

The ITA’s annual survey revealed a 3.9% drop in tin usage in 2023, significantly worse than the 1.9% contraction predicted earlier. Factoring in unrefined tin, the total decline reached 4.9%. While new energy applications like solar ribbon soldering saw robust demand, this was insufficient to offset weakness in cyclical sectors like consumer electronics and construction.

Fragile Supply Chains Add to Tin’s Troubles

While demand faltered, tin’s supply side also faced headwinds. Indonesia, the world’s largest exporter, reported a 33% decline in refined tin shipments in 2024. Regulatory restrictions and reduced mining quotas were primary culprits.

Myanmar’s Wa State, home to the Man Maw mine, faced a 40% drop in production due to the mine’s closure in August 2023. Once a critical supplier contributing 7-8% of global tin output, its continued inactivity has left a significant void. Smaller mines have restarted operations, but their contributions fall short of filling the gap left by Man Maw.

China, a key player in tin refining, has struggled to secure adequate raw materials. Imports of tin ore and concentrates from Myanmar dropped drastically, averaging just 4,000 tons per month from July to November 2024. Despite ramping up imports from other sources, the prolonged loss of Myanmar’s supply has constrained Chinese production.

What Lies Ahead for Tin?

Tin’s supply chain issues are far from resolved. While the market remained balanced in 2024, the ITA forecasts a global supply deficit of 13,000 tons by 2030, driven by rising demand in green energy and artificial intelligence sectors.

Indonesia’s regulatory stance and Myanmar’s political landscape will play pivotal roles in shaping tin’s future. Investors will closely monitor these developments, as any easing in supply constraints could stabilize the market. Conversely, prolonged issues may exacerbate future deficits.

Conclusion

Tin’s volatile journey in 2024 highlighted the complex interplay between supply disruptions and demand fluctuations. While the metal’s prospects remain tied to geopolitical and regulatory developments, its role in emerging technologies positions it as a critical commodity in the years ahead. The question for investors now is whether tin can reclaim its bullish narrative or if supply woes and tepid demand will continue to weigh on its performance.

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