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Tin is often used to protect other metals from corrosion

Tin is obtained mainly from the mineral cassiterite. The silvery-white metal is malleable, ductile, not easily oxidized in air, and can resist corrosion from distilled, soft tap, and sea water; however, it can be compromised by strong acids, alkalis, and acid salts. 

Because of its corrosive-resistant properties, it is often used as protective coating for other metals such as lead, zinc and steel. Tin-plated steel containers are commonly used for food preservation and largely contribute to the market for metallic tin. Tin bonds readily to iron and can also be alloyed with other metals such as copper to make bronze or pewter.

Tin is also commonly used in solders for joining pipes or electric circuits, in bearing alloys, and glass-making. Window glass is most often made using the Pilkington process, which involves floating molten glass on top of molten tin in order to make a flat surface. Besides the above uses, the metal is also utilized in the manufacturing of chemical compounds that are used in fire-proofing cloth, making pvc stabilizers, pesticides and wood preservatives.

Tin mining is mostly conducted by a few large companies, but there are also many smaller miners who work alone or in small groups to gather and then sell tin ore to producers or local merchants. Sometimes the existence of a multitude of these independent miners leads to difficulties in supply control. For example, in Indonesia in 2001, tin ore smuggling threatened the tin business because producers were prevented from limiting the supply when demand was weak. To counteract this problem, the Indonesian government passed legislation banning the export of non-smelted tin.

In 2007, China was the largest producer of tin (43% of world production), followed by Indonesia and Peru, and other top producing countries include Bolivia, and Brazil, which all together account for over 90% of worldwide production. The top tin producing mines are San Rafael (Peru), Bangka (Indonesia), Huanuni (Bolivia), Pitinga (Brazil), and Collingwood (Australia).

Tin demand increased approximately 19% in 2006 and is predicted to rise another 3% or more over 2007 this year.  Environmental concern over the use of lead in many products, has led to a big boost in tin demand. Interestingly, tin’s latest application is in ammunition as manufacturers bend to environmental pressures aimed at the toxicity of lead. The tin content of solder, used in electronics for example, rose from 30% to 97% as solder manufactures began using the metal to replace lead.  As emerging economies like China and India continue to grow, the demand for electronics coupled with environmental pressures to replace toxic lead with tin will no doubt help to bolster a strong demand for the metal.

Tin is also attracting investment. “Tin is looking attractive for long term for investors due to its strong fundamentals,” says Sandeep Joon, a research analyst at SMC Comtrade, Ltd. “The demand is strong, while the supply is decreasing.”

During the 1990′s and early 2000′s, tin prices were below the cost of production due to the build-up of stocks. The current supply deficit is now drawing off these stocks, which will inevitably “make the market more responsive to market forces in the future.” At current consumption rates, it is estimated that global tin supply will run out of tin in 40 years. It has been suggested that the Earth’s tin supply may well be depleted within 20 years based on a conservative 2% growth per year; however, this may be offset by increased use of scrap tin.

Joon says that the Indonesian government’s crack down on independent miners, mentioned earlier, has led to a decline in tin supply from the world’s second largest producer. According to Joon, “China has curbed exports by imposing export taxes on the metal, and Congo, Africa’s largest tin producer, has banned the export of the metal from a big producing area of the country that is controlled by rebels.”

Tin has been experiencing a strong bull market in the last three years. In late 2005, the price of tin was around $6,000/t. Since then, the price has exploded, setting a record high $25,000/t on May 15, 2008. So far this year, the tin price has increased 53%. “The key reason behind the bull run is the uneven production from Indonesia and erratic exports from China,” says Joon. 

Although tin prices dropped to a two-month low of $20,100/t on August 5, according to Edward Meir, an analyst at MF Global, “tin prices are expected to hold steady because the metal has stronger fundamentals than many others in its group.”

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