Tin production to rebound in 2021

Tin mine production is estimated to grow by nearly 97% year-on-year to 323 800 t.

However, over the coming decade, Fitch Solutions expects modest but slower growth than compared with the 2010 to 2019 period, on the back of rising tin prices.

It says that, globally, the tin mining subsector receives less attention than that of other base metals, with this compounded by the relative lack of diversity among major producing countries.

This can lead to weak project pipelines, Fitch Solutions says, noting that the sector has a fairly small number of these.

Therefore, this will weigh on production growth as declining ore grades and a lack of replacement projects weigh on output growth in the long run, says Fitch Solutions.

Moreover, it notes that output growth faces additional downside risks as headwinds from more stringent environment regulations could further hamper project development.

Therefore, Fitch Solutions expects output growth to remain capped in the coming years owing to stringent environmental regulations and declining ore grades in some major producers such as China and Myanmar.

For this year, Fitch Solutions expects tin mine production in China to stay flat following supply chain bottlenecks and movement restrictions to curb the spread of Covid-19. Over the longer term, it forecasts the country’s tin mine production will see relatively minimal growth, with marginal increases led by the country’s largest producer, Yunnan Tin.

In Peru, it expects output to recover significantly from 2020, during which quarantine measures hindered operations. Tin mine production is anticipated to grow by 17% year-on-year as low base effects and the delayed ramp up of a key project support growth.

In the long term, Fitch Solutions expects the country’s production to growth over its forecast period to 2030 compared with the previous years of decline, with 2.2% yearly growth.

For Indonesia, Fitch Solutions has revised up its 2021 tin mine production growth forecasts from 9.8% growth to 25%, as low base effects and an improving tin price will incentivise PT Timah to bring output back to previous levels.

Fitch Solutions forecasts the country’s production will register an average contraction of 0.4% yearly over 2021 to 2029 as changing regulation tapers output in the long term.

The firm says Myanmar will maintain its status as a top ten tin producer over the forecast period to 2030, although growth will be weighted to the 2024 to 2029 period.

In terms of prices, Fitch Solutions has also revised up 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 a high base, supported by spot demand and a weaker dollar.

It expects upward pricing pressure will ease later this year as refined output grows significantly in top producers such as Indonesia and Malaysia.