BMI, a Fitch Solutions company, has revised its yearly average tin price forecast for this year to $51 000/t, from $49 000/t previously, as prices remain high since the start of the surge in AI capital expenditure (capex), resulting in a sharp rise in demand for tin from the semiconductor industry.

The company’s technology team forecasts that AI capex for this year is expected to reach about $785-billion amid strong demand for data centres and higher costs related to investments into graphic processing units, central processing units and memory chips.

It also notes that three-month futures prices on the London Metal Exchange are hovering at about $54 633/t as at September 2, with the year-to-date average at $51 385/t.

“We expect prices to remain elevated in 2026, with strong investor sentiment and continued supply shortages, although [the fourth quarter] is likely to see some moderation in tin prices as supply issues moderate slightly and AI capex growth decelerates,” the company adds.

Global refined tin production is forecast to increase from 419 100 t to 478 340 t over the period from 2024 to 2030, although production growth is expected to slow from 3.6% to 1.72% year-on-year.

Consumption during that period is projected to rise from 413 380 t to 544 260 t, widening the production deficit and supporting an average tin price of $39 000/t by the end of the forecast period.

Further, BMI says that global tin stocks remain low, which exposes the tin market to bouts of volatility.

Nevertheless, BMI expects tin demand to remain resilient, highlighting that a thin pipeline of tin mining projects could tighten the tin concentrate market, leading to increased competition among smelters and constrained ore feed for refined output growth.

On the demand side, BMI also notes that the global use of tin could increase rapidly through the metal’s use in electronics, particularly within electric vehicles and through the PV cells within solar panels, thereby cementing tin’s status as a commodity of the future.