nice write up below... from l vewireAn underplayed soft metal...

nice write up below... from l vewire

An underplayed soft metal stock

Emanuel Datt, Datt Capital

Metals X (ASX: MLX), which is one of only two listed tin producers globally, is another company I’d buy if we see a selloff. It’s a name we already hold, but we would add to that allocation.

The tin market is very likely in a long-term structural deficit, and there’s very little new supply coming on - there's only about three days’ worth of actual tin in the global market. So supply is just under severe distress.

I don’t think that’s something that has happened before, and tin is critical to so many of these newer technologies. For example, it is a critical component in soldering circuit boards, which is where most tin is consumed. Metals X is quite a unique proposition but is probably the best way for Australian investors to get exposure to almost 50% of what we consider one of the world's highest-quality assets.

It’s a critical component in devices such as iPhones, which generally have about 10 cents or 20 cents of tin in each mobile phone. There is strong potential for the tin price to at least double because there’s no other option for end-users. But tin is still a tiny cost component, so the price could even double and there would still be no attempt to find a substitute. So, it’s very niche but has the potential to be very lucrative if it all plays out as we expect.

We first encountered the company after noticing the supply and demand dynamics within the industry, having already been aware of Metals X and the Renison mine, which has been operating for more than 100 years but whose life is still being extended. The stock just looks like a real value play for us, with significant leverage to a much stronger tin price.