Despite the challenges of macroeconomic weakness and the trend of miniaturization of electronic products, Cui Lin, chief representative of ITRI in China, predicts that China, the world's largest refined tin consumer market, will continue to grow slightly this year by 3-4% to 150,000 tons, thanks to double-digit growth in demand for electronic products.

        In an interview with Reuters, she said that the trend of miniaturization of consumer-friendly electronic products currently only affects the growth rate of tin consumption, but will not cause a significant decline in tin consumption. The overall performance of China's manufacturing industry, especially electronic products, is not good, and exports are not good, which will drag down the demand for tin this year. But in the long run, tin demand is still relatively optimistic.

        "The trend of global demand for tin is consistent with that of China, and the trend of China determines the global trend. ... This year's consumption is similar to that of last year. It's very flat. It's not as exciting as it was in 06-07. It is just OK, but it's not particularly strong either." Cui Lin said.

        The vigorous development of electronic information industry has stimulated the demand for tin solder, while the proportion of traditional tin consumption like tinplate has declined significantly. In China, where 40% of the world's tin consumption is reached, the proportion of tin solder required by the electronics industry in the total consumption demand is as high as 65%.

        Cui Lin explained that the production of tin smelting sector decreased a little more last year, and the consumption of the whole year also declined by 4%. This year, production is relatively stable and there is not much reduction. Moreover, this year, the external environment, especially the U.S. and Japan's economic recovery, will stimulate terminal consumption.

        This year, China's tin consumption should increase slightly. After years of rapid growth, electronic information industry, the main downstream industry of tin solder, has become the largest industry in the world. Although the industry has been impacted by the financial crisis, in the long run, the electronic information industry still has broad prospects for development.

        Last year, China's imports of refined tin and tin alloys increased 32% year-on-year, reaching a record high of 31,300 tons. On the premise of weak domestic demand, tin supply in the domestic market was excessive and inventories were rising. Imports fell by 32% from January to April this year to 6,715 tons, compared with last January to April.

        Cui Lin said that record-high import of tin in China last year is difficult to continue, because the import performance basically depends on the price situation at home and abroad. It is estimated that the import of tin in China this year will decline year-on-year, because the price ratio of tin at home and abroad is not conducive to imports this year.

        “Imports will decrease this year, the most important factor is the price difference between domestic and foreign,” Cui Lin stressed.

        As an internationally recognized "green metal", tin is a silver-white metal with soft texture and good ductility. It is widely used in electronics, electrical appliances, chemical industry, machinery, automobile, aerospace and other industries, and its use is expanding.

        Tin prices are depressed in short term, but good in the long run

        In the long run, the restrictions on raw material supply and the policies of Indonesia and other countries to restrict tin exports continue to tighten, while demand will increase rigidly, and tin prices will rise more likely in the medium and long term.

        Cui Lin believes that Indonesia, China's leading tin importer, has been slowly tightening tin exports, and the supply of resources is not optimistic, which is definitely a downward trend, which may be the driving force for the rise of tin prices.

        "Tin price shortage in supply may continue to the next 2-3 years, if the economic environment is more stable and demand picks up, the price will definitely go up, the future is more positive." She said.

        About half of China's imports of refined tin and tin alloys come from Indonesia. China's imports from Indonesia surged 73% last year on fears that Indonesia would further restrict exports of tin and other metals. Imports fell by 19% from January to April this year.

        The bull market of commodities in the past 10 years has stimulated the investment process of many non-ferrous metal mines, but the investment of tin mines is relatively lagging, which leads to the development cost of new mining projects far higher than before, and the production is also concentrated after 2015. The resources of Indonesia, a traditional tin exporter, are also declining. Therefore, in the next 2-3 years, supply shortage will occur. The problem may be more pronounced, thus boosting tin prices.

        In the short run, tin prices are still determined by demand, she said. At present, demand is weakening and supply is not decreasing accordingly, so prices may still have room to fall.

Three-month tin on the London Metal Exchange (LME) reported $21,075 per ton on Thursday, down about 10% so far this year.

        Miniaturization Trend PK New Consumption Field Expansion

        Tin has no toxic properties, and has gradually become a substitute for many traditional materials. Meanwhile, with technological updates, the use of tin continues to open up new areas. However, the rapid development of miniaturization and technology of electronic products, which account for the largest demand, as well as the uncertainty of global economic prospects, add uncertainty to the overall consumption prospects of tin.

        ITRI has previously reported that, in general, technological updates may eventually have a net negative impact on two main applications of tin, solder and tinplate. The main threats to the solder industry are miniaturization and alternative assembly technologies, while tinplate will continue to be affected by the trend of coating thinning. There may be a net increase in tin chemical products, energy related technologies and applications of ferroalloys.

        "Miniaturization is a headache for us. Miniaturization will have an impact on tin consumption, but this is a transitional period in the long run. Although the solder used per unit is decreasing, the electronic products are increasing. In addition, the computer penetration rate is increasing, and the volume is increasing. It mainly depends on who is stronger under PK in two aspects.” Cui Lin stressed.

        According to relevant surveys, miniaturization does lead to the differentiation of tin consumption and electronic products. Electronic products increase by 15%, then tin may only increase by 5%, but the total amount is still following the trend, the increment of electronic products is too fast.

        Cui Lin believes that, excluding the impact of   financial crisis from 2008 to 2009, the annual growth rate of electronic product production was about 30% in the decade before 2007, and the growth in recent years was about 10%, so the consumption of tin was also about 3-4%.

        She also noted that the impact of miniaturization is that tin consumption growth cannot match the growth of the electronics industry, but the use of tin is expanding to more consumer areas, including lithium-ion batteries, electronic glass coatings and fuel catalysts, as well as bio-bacteriostasis, and that new technologies may provide a larger emerging market for tin.