The chief had a team of eight attendants. They stopped for refreshments during the trip near Larut, which is not far from the Thai border. The elephant wandered off. It took three days to find the elephant.
Long Jaafar was relieved, but he noticed something unusual. The missing elephant had blackened feet. There was a strange heavy sand clinging to its skin. The substance was hard to dislodge.
It turned out that the heavy sand was tin. There were tin reserves in the vicinity. This accidental discovery was historic as it spurred a tin boom.
Much of the world’s tin was used to make food cans. This was essential in the West where processed food was growing popular.
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Long Jaafar alerted the British colonial government. They quickly recognised tin’s vast prospects. Chinese labour and British capital were used for production. It peaked from the 1870s to 1890s.
By 1900, the peninsula was producing over half of global tin output. Singapore was handling most of the exports. The Straits Trading building standing opposite 6 Battery Road was a vital cog in the world’s tin trade.
By the 1970s, tin was replaced by aluminium as the raw material for cans. Tin prices stagnated from the 1980s.
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The commodity has been the unsung hero this year. It has quietly become the standout performer on the London Metal Exchange, rising 41% year to date. It has outpaced copper. Though it is an illiquid market, tin is getting speculative interest.
Tin has found new applications. It is no longer the metal of sardine cans. Tin is vital to modern electronics because it is the primary metal used in soldering. It is the invisible glue that binds components to circuit boards.
The MacBook that I am writing this article on requires soldering. All smartphones require soldering. Data centres are also a major user of soldering. Tin has been around since the Bronze Age. It is now the backbone of the digital age.
Investors have taken notice. The long positions on the London Metal Exchange have surged to record levels. It exceeds visible exchange inventories. Chinese participants have joined the rally through the Shanghai Futures Exchange. This enthusiasm reflects rising anxiety over supply rather than explosive demand growth.
Global tin production is concentrated in a few countries. China is the largest producer. Indonesia, the world’s second-largest producer, is tightening enforcement against illegal mining, causing a shortage of supply.
Over 40% of the world’s tin supply is from countries facing strife. Myanmar’s giant Man Maw mine remains unstable. The conflicts in Congo have disrupted industrial supply.
Actual refined tin production fell in 2024 to about 371,200 tonnes, down around 2.7% from 2023. This was due to disruptions and regulatory constraints. The International Tin Association
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Forecasts suggest that existing mines and projects will yield around 380,000 tonnes by the late 2020s. The demand is projected to hit around 420,000 tonnes annually by the decade’s end.
It will create a widening deficit unless new mining capacity comes online.
Tin is not scarce geologically. The known resources could meet demand for decades. But, there has been low investment in new mine development. This means that few meaningful new sources are set to be commissioned through 2025–2027. The market is vulnerable to shocks.
Stock market investors do not need to look beyond Asean for proxies. PT Timah is one of the purest listed tin proxies. Over 85%–90% of its operating earnings are directly tied to tin. PT Timah is trading at mid-single-digit Ev/Ebitda. Malaysia Smelting Corporation offers over 70% earnings exposure with 6 times Ev/Ebitda. It captures price upside through smelting margins.
Straits Trading in Singapore provides a lower-volatility route. Over 50%–60% of its group earnings are linked to tin. The stock is trading at a discount to NAV.
Long Jaafar found his elephant in the 1840s. Today’s investors need to realise that there is an elephant in the tin boom.
Nirgunan Tiruchelvam is head of consumer and internet at Aletheia Capital and author of Investing in the Covid Era
