You probably never thought tin would be part of the EV revolution
Tin as a battery metal.
It’s a view that gained traction after heavyweight Rio Tinto (ASX:RIO) nominated the base metal as the one most likely to be impacted by new technology, such as electric vehicles, because of its use as an electric contact material.
Tin is primarily used as a solder component for electronic circuit boards and microchips — which accounts for about half of its global consumption.
It basically holds things together.
But a 2018 MIT study, cited by Rio Tinto Ventures boss Andrew Latham, showed future tin demand spiking on the rise of autonomous and electric vehicles, advanced robotics, renewable energy, and advanced computing and IT.
“So where should we be investing?” Mr Latham asked Lithium and Battery Materials Conference delegates last year.
“We must be pragmatic, and we can only invest where opportunities arise, but there are clear trends that will guide our approach.
“The Massachusetts Institute of Technology has researched key new technologies that will influence future metal demand and the specific metals that those technologies will require.”
The chart below summarises MIT’s analysis.
This study is now used by many explorers and miners to support the ‘tin as a tech metal’ thematic.
James Willoughby, market analyst at the UK-based International Tin Association (ITA), says the MIT study projects that significant future growth in robotics, automation, computing, renewable energies and electric vehicles will all benefit tin.
“ITA is working towards quantifying such projections,” he told Stockhead.
“MIT also points to tin as a potential battery material and this has been much of our recent focus.
“Growth in new energy markets, including EVs, is expected to have significant impacts in the 2025-2030 timescale, although there are large uncertainties in longer-term scenarios.”
Thomas Hohne-Sparborth, economics and analytics director at Roskill, says there is research into using tin as an anode material in EV batteries, but it may not be the demand driver the industry is hoping for.
“Last year, for instance, BYD – one of China’s largest EV makers – patented a tin-cobalt-carbon anode material, which contained 5 per cent tin,” Mr Hohne-Sparborth told Stockhead.
“But it has only been one among a number of other [anode] contenders, such as silicon.
“In addition, its use would likely be transitional, as over the longer-term much of the industry is focused on the development of so-called ‘solid state’ batteries, which feature a lithium metal anode material instead.”
That said, there is certainly upside potential for tin from the EV sector, Mr Hohne-Sparborth says.
“Particularly as the adoption of solid-state batteries will be gradual and may not be rolled out to all types of vehicles, where a market for tin or silicon anode materials may remain,” he says.
Oh no, we’re running out of tin
More tin is required in the world regardless – tin demand is growing at a steady 2 to 3 per cent from existing tech demand — and there is limited new supply entering the market.
Current visible global tin stocks are very low (although the Chinese keep large stockpiles on the down low, so the market isn’t as illiquid as it looks).
London Metals Exchange (LME) tin stocks have been maintained at record low levels since the second quarter of 2017.
Check out this five-year chart:
ITA’s James Willoughby says there is “potentially significant” supply pressures for some major existing production to 2022.
” There are a number of other projects with potential and clearly higher prices would accelerate market entry,” he says.
Renata Barros, associate tin consultant at Roskill agrees it would require an extended period of sustained, strong prices to encourage much of this new supply.
Many tin producers in Brazil, Bolivia and Australia have been working to expand production capacity.
There are also a number of new projects in Australia, the Democratic Republic of Congo, Morocco, Namibia and Spain at feasibility study stage, or that stared producing recently. It’s probably not enough.
“The tin market could remain in deficit as tin use increases and diversifies,” Ms Barros told Stockhead.
The ITA predicts prices to remain stable throughout 2019, picking up to around $US22,000/t towards 2022.
But there’s been some positive movement already – prices have well and truly recovered from late November lows of $US18,400/t, currently fetching about $US20,785/t.
Besides record low LME stocks, several other reasons may be contributing to price rises in 2019.
Roskill says the trend might be a reflex to growing US-China trade hopes after official talks in recent weeks, with the prices of other metals such as copper, nickel, zinc and lead also recovering.
Or who knows — it might also be growing awareness of tin’s potential role in the EV revolution.
Here’s a table of ASX stocks with exposure to tin>>>
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop