Industry Bulletin: Tin prices surging due to growing demand for lead-free solders from electronics industry
May 20, 2008
In our ongoing efforts to provide you with broader communications and industry information, we are pleased to issue this Industry Bulletin discussing Tin, a minor base metal that has recently seen a surge in demand and price and to which Avalon has exposure through its East Kemptville Tin-Indium project. Demand for tin is growing rapidly, due to its environmentally-benign properties and its increasing application in solders for electronics, where it provides a non-toxic alternative for lead.
Uses of Tin
Tin was one of the first metals known to man. Throughout ancient history, various cultures recognized the virtues of tin in coatings, alloys such as bronze or pewter, and use of the metal increased with advancing technology. Today, tin remains an important metal in industry even though its consumption is much smaller than many other metals, in the order of 300,000 tonnes consumed annually, compared with some 20 million tonnes of aluminum. The reason is that in many modern applications, only small amounts of tin are required.
Tin is a malleable, ductile, silvery-white metal. Tin bonds readily to iron, and has been used as a coating on steel to prevent corrosion. This application was so widely used for food containers that they became known as "tin cans" or "tins". ´Tin foil´ was also once a common wrapping material for foods and drugs; however it was replaced in the early 20th century by the use of aluminum foil. Despite this evolution, many still (incorrectly) referred to these as "tin foils".
There are many other modern uses for tin and tin alloys including:
- electrically conductive coatings used in panel lighting and in the production of frost-free windshields
- floating molten glass on top of molten tin (creating float glass) in order to make a flat surfaces (e.g. window glass)
- chemical compounds used in a variety of applications from fire-proofing cloth, to making PVC stabilisers and wood preservatives.
- niobium-tin compounds commercially used as wires for superconducting magnets.
The biggest driver on tin demand in recent years has been from environmental pressures and the move to lead-free solders in electrical circuits to eliminate the problems of toxicity caused by lead, backed by legislation in many countries. This has led some to characterize tin as a "Green Metal". Solders that contained as little as 30% tin, are being replaced with solders containing aver 95% tin for the same tasks, a huge boost in demand. Compounding this new demand has been the enormous growth in sales of electronics products and electrical appliances in both developed and emerging markets.
Tin production is concentrated in South East Asia, Latin America and China. Tin has not been mined in North America since 1993 and most historical production was by-product to zinc and copper. Until 1985, Tin production and pricing was controlled by an international cartel that collapsed with the release of large stockpiles into the market in the late 1980´s causing prices to fall from US$6/lb to as low as $2/lb in the early 1990´s.
As a commodity traded on the London Metal Exchange, prices have shown a dramatic increase over the past 2-3 years. In 2005 and 2006, tin prices averaged in the order of US$4.00/lb. In 2007, tin reached $6.50/lb. During 2008, prices have steadily increased, such that current prices are in the order of $11.00–12.00/lb. The world tin price has rallied by 50% since the start of the year, buoyed by broad strength in pricing of base metals and such tin-specific factors as uneven production from Indonesia and erratic exports from China. In a quarterly commodities report, UBS Securities says tin prices should peak this year and decline in 2009