Research Summary
The report provides an in-depth analysis of the global tin market, highlighting its historical significance, current use cases, supply and demand dynamics, and potential future growth drivers. It also discusses the challenges faced by the industry, including supply concentration risk and high production costs. The report suggests that the tin market is poised for a potential price surge over the next 3-5 years and presents investment opportunities in tin-focused mining companies.
Key Takeaways
Supply and Demand Dynamics of Tin
- Supply Concentration Risk: The report highlights a supply concentration risk in the tin industry, with 75% of the supply coming from just four countries. The majority of tin has already been mined, leaving behind lower-grade, higher-risk, and costlier extraction challenges.
- Projected Supply Deficit: The report projects a significant supply deficit of tin, expected to increase from approximately 3% to 15% of total usage within a few years. This is driven by structural underinvestment in new supply, lower ore grades, and complex existing reserves.
- Increasing Demand: The demand for tin is expected to rise, fueled by long-term growth in sectors such as electric vehicles (EVs), green energy, and semiconductor/data centers. Tin’s price inelasticity means that price changes have a minimal impact on demand.
The Great Electrification
- Fourth Boom Period: The report suggests that tin is entering its fourth boom period, dubbed “The Great Electrification,” driven by the increasing electrification of society. This includes the growth of data centers, wearable devices, solar panels, semiconductors, and EV batteries.
- Role in EVs: An electric vehicle contains twice the amount of tin compared to an internal combustion engine (ICE) car, highlighting the metal’s importance in the automotive industry’s shift towards electrification.
Investment Opportunities in Tin
- Limited Investment Vehicles: Investment opportunities in tin are limited due to the absence of a liquid futures market, tin ETFs, or large-cap tin producers. Direct investment in primary producers is the preferred method for exposure.
- Alphamin Resources (AFM): Alphamin Resources (AFM) is favored for investment due to its high-grade resource, low-cost production, competent management team focused solely on mining tin, and the company’s non-promotional approach to its stock.
Actionable Insights
- Monitor Tin Supply and Demand: Investors and traders should closely monitor the supply and demand dynamics of the tin market, including the projected supply deficit and increasing demand driven by sectors such as EVs, green energy, and semiconductor/data centers.
- Research the Potential of Alphamin Resources (AFM): Given the limited investment vehicles for tin exposure, investors should research the potential of Alphamin Resources (AFM), which is favored for its high-grade resource, low-cost production, and competent management team.
- Stay Updated on Market Developments: It’s crucial to stay updated on market developments, including the transition to lead-free soldering and the growth of new technologies. Monitoring tools such as a “Tin” watchlist in Koyfin and following the International Tin Association (ITA) are recommended.
