Global tin consumption is expected to increase by more than 10% this year, to reach a new record level of 367,000 tonnes, or more than 1,000 tonnes per day. Detailed statistics now available for the first half of 2006 show a stunning year-on-year growth rate of 18.6%, driven by the strength of the world economy, growth in the Asian electronics industry and rapid increases in sales of lead-free solder in most key markets.
The statistics were part of a report made by independent analysts CRU to the directors of ITRI at its bi-annual board meeting last week. Other key points of CRU’s statistical review and forecast were:
• World consumption in January-June 2006 amounted to 189,300 tonnes, almost 30,000 tonnes higher than in the same period of 2005. Much of the increase occurred in the Asian market, where apparent tin usage rose by almost 27% to over 117,000 tonnes. There was also an unusually large increase in European consumption, up 12.0% to nearly 37,000 tonnes. Meanwhile demand in the Americas rose by 4.2% to over 33,000 tonnes.
• China is now by far the world’s largest tin market, and consumption has grown very rapidly again this year. In January-June apparent consumption rose by over 34% year-on-year to almost 62,000 tonnes and CRU estimates that annual consumption will reach 123,000 tonnes. The second largest Asian market, Japan, has also grown very rapidly this year, with consumption in January-June up by almost a third to just under 22,000 tonnes.
• The first-half consumption figures were undoubtedly boosted by increased sales of lead-free solders worldwide, with a particular stimulus provided by the EU regulations on the use of hazardous substances in electronic products (RoHS) which came into force on 1 July.
• CRU noted that the very large increase in demand in the first half might partly be due to hidden stock building. The passing of the EU RoHS deadline and slower world economic growth is likely to result in slower growth rates in the remainder of 2006 and next year. Summary historical and forecast data is shown in the table.
• World tin supply is expected to be roughly in balance with demand this year, following a large market surplus in 2005. The positive outlook for consumption and an assumed small decline in Indonesian tin production is forecast to result in a small market deficit of 5 – 6,000 tonnes in 2007.
ITRI’s Directors agreed that the organisation’s top priority for market studies and statistics over the next year will be the analysis of tin production costs, which have increased considerably in the last three years. This work will help identify medium-term equilibrium and floor prices for tin and will also compare costs and working practices between major, sustainable mining operations and the small-scale artisinal producers which currently account for the majority of world mine production.
David Bishop, Managing Director of ITRI, commented: ‘ITRI continues to focus on development of new technologies which are providing a solid base for future tin consumption growth. At the same time we recognise, given the fragmented nature of the tin industry, that there is a need to provide stakeholders with a clearer, more transparent, understanding of the present cost structure of tin production’.
ITRI applauds the recent actions of the Indonesian government to regulate tin mining on Bangka, the largest tin production area in the world. Artisinal mining in Indonesia currently accounts for a third of global tin production, and local independent smelters contribute some 20% of refined tin production, but it is recognised that they operate in an unregulated manner with little environmental control and no land reclamation. This is a local issue, but with implications for the global market, making it all the more important that the Indonesian government takes responsible action. The artisinal miners and local smelters costs do not reflect the full cost of environmental management, health and safety, and social responsibilities and it is important in the future that they adopt practices more in line with international standards.
