Electronics

According to news on May 14, as the demand for electronic products remains high and the COVID-19 epidemic has blocked transportation, the price of tin has risen violently this year and is approaching a historical high again, which is the first time it has been seen in 10 years.

The Wall Street Journal reported that the current 3-month tin price on the London Metal Exchange (LME) has reached US$29,785 per ton, which has soared 46% this year. This is the first time in 10 years that it has approached a historical high. The increase has even surpassed copper and aluminum. Metal, once again challenged the new high record set in 2011, when it broke through US$33,000 per ton.

The recent sharp rise in commodity prices has triggered market concerns about uncontrollable inflation. Companies may pass on production costs to consumers and prompt the Federal Reserve (Fed) to withdraw loose monetary policy. Asset prices that have benefited from the loose financial environment in the past will be lost. The support force caused a huge shock in the market.

The report pointed out that the price of tin continued to rise this year due to the pandemic that caused the supply of tin ore in Indonesia and other producing areas to be interrupted. The severe shortage of seaborne containers around the world also delayed the shipment of tin from Southeast Asia and Latin America by several weeks.

International Tin Association (International Tin Association) analyst James Willoughby said that the electronics industry uses solder to connect new semiconductor products to circuit boards and electronic devices, and tin is an important raw material for solder, accounting for about half of global tin demand.

Benefiting from the general surge in metal prices, mining stocks performed very well. The MoneyDJ XQ global winner system quotation shows that as of Wednesday (12th) this year, iShares MSCI global metal and mineral producer ETF (PICK.US) stock price rose 33.76%, much better than the broader market S&P 500 index rose 8.17% over the same period.

MarketWatch previously reported that metal prices are mainly supported by two major bulls: First, the continued depreciation of the U.S. dollar. Citigroup analyst Ephrem Ravi pointed out that the depreciation of the U.S. dollar has increased the purchasing power of major consumer markets for commodities (especially China). , Miners’ debts are mostly denominated in U.S. dollars, and the depreciation of the U.S. dollar also helps to reduce debt repayment pressure, giving mining stocks more room for performance.