Mines: an improvement in tin prices expected in 2021
Financial risk management, solutions and information firm Fitch Solutions Country Risk and Industry Research expects global tin mine production to rebound this year as mines in Indonesia and Peru are not not hampered by government restrictions and can operate profitably in a higher tin price environment.
Tin mine production is expected to grow by almost 97% year on year to reach 323,800 t. However, over the next decade, Fitch Solutions expects modest growth but slower than in the period 2010-2019, due to rising tin prices.
He says that globally the tin mining sub-sector receives less attention than that of other base metals, which is compounded by the relative lack of diversity among major producing countries.
This can lead to weak project pipelines, says Fitch Solutions, noting that the industry has a fairly small number of them.
Therefore, this will weigh on production growth, as lower ore grades and lack of replacement projects will weigh on long-term production growth, says Fitch Solutions.
In addition, he notes that production growth faces additional downside risks, as headwinds from tighter environmental regulations could further hamper project development.
Therefore, Fitch Solutions expects production growth to remain capped in the coming years due to stringent environmental regulations and declining ore grades at some large producers such as China and Myanmar.
For this year, Fitch Solutions expects production from tin mines in China to remain stable following supply chain bottlenecks and movement restrictions to curb the spread of Covid-19. Longer term, he predicts that the country’s tin mining output will experience relatively minimal growth, with marginal increases led by the country’s largest producer, Yunnan Tin.
In terms of price, Fitch Solutions also revised upward its tin price forecast for this year to an average of $ 19,500 / t from $ 18,000 / t previously, as prices started the year from from a high base, supported by spot demand and a falling dollar.
He expects the upward pressure on prices to ease later this year as refined production increases dramatically in major producers such as Indonesia and Malaysia
