The global tin market is largely driven by producers in Indonesia, China and Peru – the world’s biggest tin markets. The production of the silverly, malleable metal – used for things like steel-plating – has been in decline in these markets, in part because poor weather has challenged operating conditions and undermined transport. This has led to supply constraints, especially during the second half of 2010. At the same time, some production is being withheld from the export market thanks to dwindling inventories, according to a recent Commerzbank report.
These growing supply constraints will continue into 2011, the bank’s analysts said, in part because because producer stockpiles are largely exhausted. That will have a knock-on effect on exports.
At the same time, Canada’s Adex Mining says the medium-term outlook for tin is positive, which is a good thing, given ongoing efforts to bring its Mount Pleasant mine into production by 2012.