Guotai Haitong has released a research report indicating that global tin prices are poised for sustained growth amid tightening supply dynamics. Declining ore grades worldwide are constraining marginal production increases while pushing production costs upward. On the demand side, artificial intelligence advancements and the consumer electronics recovery are expected to maintain robust consumption patterns. With supply concentration among few global players, mining companies now wield stronger pricing power, creating a favorable environment for tin price appreciation.
Recommended investments include Yunnan Tin (000960.SZ) and Xingye Mining (000426.SZ), with Huaxi Nonferrous Metals (600301.SH) as a related opportunity. Key insights from Guotai Haitong's analysis follow:
Persistent supply constraints continue to limit output growth. Global tin ore grades are declining steadily, elevating production costs. According to the International Tin Association (ITA), the 90th percentile of full production costs reached $25,581/ton in 2022 and may climb to $33,800/ton by 2027. Myanmar's mines, positioned on the higher end of the cost curve, face slow restarts due to a 30% physical export tax at current LME prices. Political instability in certain African and South American nations further disrupts supply chains. The report forecasts 2025 global tin output at 300,000 tons, a modest 2% year-on-year increase. Recycled tin production faces raw material shortages, contributing minimally to supply growth. Total tin supply is projected at 380,000 tons for 2025, up just 2% annually.
Downstream sectors are fueling demand expansion. Solder applications, representing 56% of tin consumption, stand to benefit from AI implementation and electronics innovation. Semiconductor industry stabilization will accelerate solder demand. Notably, photovoltaic solder constitutes merely 20% of total tin solder output, minimizing solar sector impacts. Stable chemical demand, surging tinplate exports, and copper-tin alloy needs from Western grid upgrades provide additional support. This creates an anticipated 8,300-ton refined tin deficit for 2025. While inventories show recent accumulation, stock levels remain substantially below 2024 peaks at historically moderate volumes, underpinning prices.
Global monetary easing supports price appreciation. U.S. May PCE inflation moderated to 2.34%, approaching the 2% target. Despite June's 147,000 non-farm payroll additions and 4.1% unemployment, underlying labor market risks persist according to Economic Daily analysis. Seasonal factors and potential tariff policies may pressure employment data. CME FedWatch indicates market expectations for renewed Fed rate cuts by September 2025, creating favorable "denominator effects" for asset prices. Increasing global liquidity should gradually improve demand expectations for upstream commodities.
Risk factors include unexpected supply surges and significant price volatility.