Tin prices hit their highest level in ten years on Friday, driven by a boom in consumer electronics and sales of 5G smartphones.
The metal, which is used in solder in circuit boards, has risen by 133 per cent since its low in March 2020 as sales of smartphones, laptops and iPads have surged owing to people working and studying from home.
Tin last traded at $30,760 a tonne, down from a high of $30,960 a tonne on Friday.
Tin is one of a number of commodities benefiting from a consumer rebound as economies recover from the impact of Covid-19. Copper prices have also risen by 30 per cent this year.
“Whatever electronics are sitting in offices are now sitting in people’s homes, and nobody got rid of the old electronics, they bought new ones,” Jonathan Narunsky, a tin trader at Gerald Metals, said. “Electronics consumption has effectively doubled.”
Electronics retailers have reported bumper sales this year with Apple posting double-digit growth in the first quarter of 2021 led by iPhone sales.
“Without tin solder, technology comes to a halt,” Maritz Smith, chief executive of tin miner Alphamin said. “Wherever you look tin is used in circuit boards and supply takes time to catch up.”
Higher prices have benefited tin miners, with shares in China’s Yunnan Tin increasing by 43 per cent this year on the Shenzhen stock exchange. The company reported its first quarter net profit rose by 588 per cent from a year earlier during the pandemic’s lows.
The price of tin is also benefiting from supply disruptions in China and the Democratic Republic of Congo.
A drought in the south-west province of Yunnan has led to a shortage hydroelectric power, forcing some tin smelters to close for 10 to 20 days and impacting between 1,000 to 2,000 tonnes of production, according to the International Tin Association.
“Currently, heavy rains are forecast for June, which will refill the hydropower reservoirs,” the association said. “However, it is unknown how long this will take, and smelters are currently in the dark about restarting.”
The restrictions mean China is less likely to export tin to international markets, Narunsky added. “The market was anticipating some Chinese units leaving the shores,” he said.
The eruption of a volcano outside Goma in the DRC last weekend has also delayed the processing of export documentation. The DRC produces around 8 per cent of the world’s tin supplies. Alphamin, whose mine is around 200 kilometres west of Goma, said export services were likely to return to normal in the first week of June.
“We do believe that’s temporary, the government is working very hard in resolving that,” Smith said.