In 2018, a study completed by a research group at MIT ranked various metals and minerals that were expected to be most positively affected by new technologies in the future.
At the top of that list were the usual suspects: lithium and cobalt. That’s because both of these metals play a critical role in EV and other green energy technologies, which will be vital to combating climate change going forward.
But the No. 1 metal MIT says will be most impacted by new technologies is one you might not expect at all — tin.
Before we continue, let me show you that chart:
You probably know tin as a metal used in canning. However, tin is used in a million different things. Like other base metals, tin has way too many specific applications to count, but its absolute most important use is as a solder. More than half of the world’s tin supply goes into making solder.
As you might have guessed, the demand for solder has steadily increased over the past century as the world has developed and come to rely on electricity more and more. There is no exact data on global solder demand, but the increased demand for solder is reflected in the demand for the metals themselves.
According to the U.S. Geological Survey (USGS), global tin mining increased by more than 75% between 1950 and 2019 (prior to the COVID pandemic, which interrupted mine supply). USGS data also shows global lead mining increasing by 185% during the same period.
As the world continues to develop further and the population expands, the demand for solder for electric devices will only increase. The International Energy Agency says in its latest report on electricity:
In advanced economies, electricity demand recovers to pre-crisis levels by 2023 and then rises by 0.8% per year through to 2030, driven by the electrification of mobility and heat. In developing markets and emerging economies, rising levels of ownership of household appliances and air conditioners, together with increasing consumption of goods and services, underpin strong growth, exceeding pre-crisis levels by 2021.
In short, the world is going to need more and more solder for electric circuits every year for the foreseeable future.
But specifically, the world is going to need more and more tin for solder.
Up until relatively recently, electric solder was a tin/lead alloy. However, new regulations have all but eliminated lead-based solders from commercial manufacturing. Today, typical electric solder is an alloy containing 99.3% tin and 0.7% copper.
Tin is actually quite a rare metal. And the majority of production and resources are located in China and southeast Asia. According to the USGS, China and Indonesia account for 54% of the world’s tin production and control more than 38% of the world's tin reserves.
That means it’s not exactly easy for investors to get exposure to the tin market.
There is no tin bullion market to speak of. And there’s only one tin ETN and no other specifically tin-focused investment funds I’ve ever heard of.
There are tin contracts on the London Metal and Shanghai Futures exchanges, but the CME doesn’t list tin futures or options.
There are also a handful of public mining companies open to North American investors that are involved in the tin industry in some way. However, there are very few companies focused only on tin mining or smelting, and that’s a shame because tin prices were screaming higher earlier this year.
Tin Prices — Five Years
There is a lot to be said about tin and I’ve already taken up a lot of your time here, but we will continue to look for developing opportunities in the tin market and report back to you.
Tin not your thing? Maybe you'll enjoy what my colleague Jason Williams is up to.
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