Tin Trading & Markets

Tin : Futures | Market | Price | Further Reading

Tin is a metal that is silvery-white in colour. It has several qualities that make it appealing and useful to commodity trading participants. Firstly, and perhaps most importantly, it is highly resistant to corrosion. This property prevents tap water, salt water or distilled water for corroding tin, which allows it to have numerous applications for which other metals would be unsuitable. Secondly, it does not oxidise on contact with the air, and these two properties combine to make tin ideal for use as a coating for other metals. Tin also has a low toxicity level and is easily recycled, make it attractive on environmental grounds.

Tin Futures

Tin futures are appealing to traders on the grounds that tin has a wide variety of applications, and as a result of this tin does not tend to suddenly decrease in price, allowing a modicum of security to tin traders. An increase of demand for tin in the future may suddenly send prices up however, so tin is classified by most traders as a ‘hold’ commodity.

Tin futures are primarily traded on the London Metal Exchange (LME). They are traded on the LME under the ticker symbol of SN; traders of LME tin futures are provided by the exchange with a number of tools to track prices, analyse market data etc.

Tin Market

The end use of the largest amount of metal traded on the tin market is the solder industry, with around 50% of tin used in the manufacture of solder in 2006. The tin in the solder was initially combined with lead, but new legislation governing the use of lead in such applications has sparked the search for other alloys that can be used in its place. Other significant markets for tin include the alloy plating market, which harnesses the anti-oxidising and anti-corroding properties of tin to produce coating for other metals, which can subsequently be used safely in constructions that are exposed to the weather. These qualities are always embraced by the food industry, which uses tin in manufacturing cans and tins that can preserve food for long periods. Indeed, this is from where the term ‘tin can’ originates, as it was the primary material used when tins rose to popularity as a vessel for food and for alcohol. Tin is also used to make sheet glass for windows, in a process whereby the molten glass is floated on top of the molten tin.

China is the largest producer of tin in the world, with Indonesia and Peru also being large producers of this commodity. China is also the largest consumer of tin worldwide.

LME Tin Price

When trading tin at the London Metal Exchange, there are several factors which have an effect on the LME tin price. The price of LME tin can obviously be affected by the global demand for the metal. Tin will remain in a reasonable level of demand while it is still the primary material used for manufacturing cans, but if a cheaper alternative appears then the demand for tin could suddenly drop. General global economic trends can also have an effect on LME tin futures trading, as a downward trend will mean few construction works and luxury electrical goods will be produced, both of which have tin as a key component. Furthermore, as solder that contains both tin and lead is now seen as environmentally unsound due to the toxicity of the lead, new materials may come into use that render tin in soldering redundant. This would again decrease demand and decrease the spot price of tin, and the price of tin futures.

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