When the Bronze Age first began, it was an alloy that combined copper and arsenic. But by 2000 BC or so, arsenic was already largely replaced by tin. That was because it was discovered that handling arsenic was dangerous to our health as the fumes from refining it were toxic. Tin isn’t toxic, the alloying process is easily controlled, and the resulting alloy is stronger. Since tin is relatively rare, trade lines were established, so that the tin in Cornwall in Britain could reach as far as the lands in the Eastern Mediterranean. The metal was also used for other alloys of the time, such as pewter.
Then in 1795, a French chef invented the canning process to win an award from Napoleon Bonaparte. The French emperor wanted a more efficient way of preserving food for military use. A year later, a British merchant obtained a patent to used tinplated steel for food cans, and this proved popular because tin was corrosion-resistant. This can arrived in America in 1818, and it was used during the American Civil war. The tin can would be in use until the mid-20th century when aluminum cans came into the picture.
Today, it is still used extensively in many products. The demand for the metal is high, though it’s quite rare with just 2 parts per million in the Earth’s crust. About 250,000 tons are mined each year, and although many countries have large reserves it is theorized that in 40 years there will no longer be any tin that can be mined.
Below is the historical Tin price per metric ton.
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Price History of Tin
Dating back to 1921, there had been a long history of informal agreements between the countries that produced the metal and the countries that bought it. The ITC (International Tin Council) was formed, and from 1956 to 1985 it was able to control the price of tin that was agreed upon. This approach ran counter to the free market system, and it was designed to ensure that consumer countries could access a reliable supply of the metal, while the producers made a decent profit.
The ITC bought the metal when the price was low, and then when the price climbed too steeply it sold from its stockpile to increase the supply and lower the price. But the stockpile it accumulated wasn’t enough to set up an artificial ceiling, and the price rose sharply due to the inflation of the 1970s.
Then the recession hit in 1981. The ITC had managed to prevent the price of the metal from crashing by buying the metal for its stockpile, but that required them to borrow money extensively to add to its financial resources. By 1985 the organization had reached its limit, and so a tin crisis arose. It was removed from trading in the London Metal Exchange for 3 years, the ITC dissolved, and the price dropped sharply to around $4 a pound from $8.46 a pound in 1980. This price remained constant until the end of the century.
But the 2000s were a different story, and it has bounced back following the 2008-09 global financial crisis. It reached almost $15 a pound in 2011, but as of March 7, 2016 its price is at $7.87 a pound.
Tin as Investment
It is theoretically possible to buy the metal in bars or bullion, but this is not practical. Its low price per pound means that any substantial investment will come with a very costly storage expense. It’s also not feasible to buy stocks in tin mining companies. These companies tend to mine many kinds of metal, and most of the tin comes from emerging markets.
Thus, your investment opportunities are somewhat limited. You can deal in futures contracts, and you can trade in the London Metal Exchange. You can also trade in futures contracts in the Indonesia Tin Exchange and the Kuala Lumpur Tin Market.
You can also buy shares in exchange-traded funds. Some of these funds deal in various metals that include tin. But a few are linked to an index of tin futures.
Purposed Used For
This metal has several noteworthy uses. Since 2006, the main use for the metal has been in the solder industry. It became the main component in solder after government legislation outlawed the use of lead in electronics. Since then, around 55% of the metal is used for this purpose.
It’s also widely used as plating for steel, iron, lead, and zinc. Tin-plated steel containers are still widely used, especially for food preservation.
It is also combined with other metals to create specialized alloys, and that’s a very familiar role for tin since it was combined with copper to make bronze ages ago. That’s still true today, and alloys that contain tin (such as brass and pewter) are used for decorative figurines, wires, superconducting magnets, brass instruments, and organ pipes.
It’s apparent that the use of tin won’t stop for the foreseeable future, and only the huge reserves are keeping the price low. But in 40 years, who knows?