LONDON (Reuters) - It’s typical of tin that it didn’t make it onto the International Energy Agency’s (IEA) list of metals needed to power the clean energy transition. Although designated a critical mineral by both the United States and China, tin has a habit of sliding between the gaps of the decarbonisation narrative. Around half of all tin used globally goes into soldering circuit-boards, the hidden drivers of the electronic world, meaning it is everywhere but nowhere to be seen. The metal may not grab the headlines in the same way as cobalt or lithium, but electric vehicles aren’t leaving the garage without it. The forgotten critical mineral is also a harbinger of the pressures to come across the critical minerals spectrum. The IEA warns that “today’s supply and investment plans for many critical minerals fall well short of what is needed to support an accelerated deployment of solar panels, wind turbines and electric vehicles.” (“The Role of Critical Minerals in Clean Energy Transitions,” May 2021) Right now, the tin market is struggling to supply even current demand with a ferocious squeeze gripping both the London Metal Exchange (LME) contract and the physical supply chain. Tin demand will only increase as the decarbonisation momentum builds, which poses big questions of a supply chain that is dominated by an unlikely combination of artisanal and small-scale miners (ASM) and state-owned producers. SUPPLY CRUNCH London Metal Exchange (LME) three-month tin hit a 10-year high of $30,650 per tonne on Tuesday. The cash price is around $2,000 per tonne higher, as this year’s unprecedented time-spread tightness shows no signs of easing. Inventory is super low. There are just 1,235 tonnes of tin in LME warehouses, most of it earmarked for physical load-out. The remaining 360 tonnes represent around eight hours’ worth of global consumption basis 2019 refined tin demand of 359,000 tonnes. Physical supply chains to European and North American buyers are depleted. Metal in Rotterdam is commanding a $1,000-$1,300 per tonne premium over LME cash, according to Fastmarkets. Baltimore metal is even more expensive, assessed at a premium of $1,800-2,150. The strength of the post-pandemic demand rebound has evidently wrong-footed producers, with a struggling supply response not helped by the ongoing disruption in the freight sector, particularly in the container segment used to ship tin. Some supply relief is now coming from China, where the high LME price has prised open an export-friendly arbitrage window, and the United States Defense Logistics Agency, which has resumed sales from its strategic stockpile after a 10-year hiatus. DEFICIT MARKET The current super-squeeze is not just due to a passing misalignment of supply and demand, but rather is the culmination of years of production shortfall. The global refined tin market has registered a supply deficit in five of the last six years to the collective tune of 28,000 tonnes, according to the International Tin Association (ITA). The Association is expecting another 2,700-tonne deficit this year. Excess stocks accumulated after the last price spike in 2010-2011 have “been finally reduced to historically below-average levels”, the ITA said. Against such a historical backdrop, any combination of supply disruption is going to have an outsize impact on price. Yet there is no shortage of tin in the ground. The ITA calculates there are 5.5 million tonnes of tin in known reserves, enough to last 18 years at 2019 production levels. Identified resources of 15.4 million tonnes would be enough for 50 years. (“2020 Report on Global Tin Reserves and Resources”) That is almost certainly a significant undercount given a lack of reporting by state producers and the prevalence of ASM in the tin supply chain. Small-scale mining cooperatives don’t do reserve calculations. BOOM AND BUST EXPLORATION The ITA estimates ASM accounts for around 40% of tin’s global mine production, which means it is even more significant a component of supply than it is in the cobalt market. Indeed, artisanal miners have been behind two of the biggest tin discoveries of recent decades. The Bom Futuro mine in Brazil, one of the world’s largest, was developed by wild-cat miners in 1987 and is still operating today. More recently, small-scale miners in the Wa region of Myanmar have transformed the country into the world’s third largest producer in the space of 10 years. In Indonesia, the world’s largest tin-exporting nation, the uneasy relationship between state-owned PT Timah and small-scale miners operating on the tin-rich islands of Banka and Belitung has had a disruptive impact on the country’s supply for many years. The high ASM representation in the global supply chain poses the same social issues facing cobalt, although it’s worth noting that tin has been something of a trail-blazer when it comes to monitoring and tracing mineral flows from the Congo. It also means that exploration for new tin deposits has tended to follow a boom and bust cycle, driven by the ASM sector. There are no multinational mining companies in the tin sector. Deposits tend to be too small to get on the radar of the likes of Rio Tinto or BHP. The current crop of specialist tin producers are either focused on extending the lives of existing mines or, in the case of Chinese players, facing ever higher environmental hurdles to open up new mining areas. There is, as the ITA notes, “a small but real possibility that a surge in production will occur due to the discovery of a world class tin deposit”. Given recent tin market history, the chances are that it will be artisanal workers who find it first. BOTTLE-NECK? Tin ticks all the boxes on the list of supply challenges higlighted by the IEA. “High geographical concentration, the long lead times to bring new mineral production on stream, the declining resource quality in some areas and various environmental and social impacts all raise concerns around reliable and sustainable supplies of minerals to support the energy transition,” it said. The IEA concludes that only a concerted response from policymakers and suppliers will ensure that mineral supply is an enabler, rather than a bottleneck, to the clean energy transition. The report spans the new energy metals spectrum from lithium through cobalt to rare earths. Next time, though, it should really look at tin. Because the current market squeeze doesn’t bode well for future reliability of supply of this particular critical mineral. The author is a Reuters columnist. The opinions expressed are his own Our Standards: The Thomson Reuters Trust Principles.