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Investing in Nanotech Commodities

Brian Hicks

Written By Brian Hicks

Posted November 25, 2013

We’ve talked about graphene plenty on Energy and Capital, and for good reason.

The substance opened up the world to the power of molecule-thin, hexagonal layers of different elements. We’ve seen graphene batteries offer up to 10 times the power capacity of seen in normal batteries. Now, we’re seeing an increase in nano-scale, two dimensional materials carrying a similar -ene suffix.

The U.S. Department of Energy’s SLAC National Accelerator Laboratory and Stanford University have just debuted a new material called stanene that boasts an amazing 100% electrical energy efficiency at around room temperature.

If the name didn’t give it away immediately for you, let me clue you in: it’s made of tin atoms.

Tinplating is now the second largest use of tin.  Its largest industrial application today is in solder.  Tin has long been known as an excellent conductor and it is a major component in the solder you find on circuit boards. 

It’s an essential building block in electrical tech.

But stanene is what is known as a topological insulator. The inside of the material acts like an insulator that cannot conduct electricity, but the outside is a highly efficient conductor. The substance ends up being even better than a semiconductor because electrons can flow across the surface.

Topological insulators like stanene can be thought of as having a positive top and negative type bottom, and when layered, they create unique channels on their sides that conduct electricity with zero resistance.

If used in place of semiconductors in computer chips, topological insulators would result in improved speed and decreased power consumption. Stanford researchers are conducting experiments with the substance right now.

The next logical question for investors might be: Where do I get in on this?

Stanford has been working with topological insulators for more than a decade and the discovery of tin’s conductive power is a big one.

It’s not the only discovery, though.

More than five years before this research group’s tin discovery, they hypothesized that combinations of bismuth, antimony, selenium, and tellurium would make ideal nanoscale thermoelectric materials.

This hypothesis was later supported by the NIST Center for Nanoscale Science and Technology, The University of Maryland, and Seoul National University, which found combinations of these materials to be topological insulators.

Within weeks of the tin announcement, another group including researchers from SLAC found Bismuth Tellurocholride to be a potential room temperature topological insulator as well. This material has other unique properties that could be applied in a new type of magnetic information storage.

Stanene, like graphene presents an exciting look into the future, and it’s far from ready for market entry.

However, the consumption of tin could change yet again based upon this discovery.  In the United States, for example, approximately 53 percent of the silicon we consume goes to making ferrosilicon for semiconductors.  Tin could stay dominant in solder and alloys, but could encroach on the semiconductor space.

What’s more, the discovery of stanene comes during a tumultuous time for tin, and it’s an area worth watching for commodities investors.

Indonesia’s big tin play

Indonesia is the world’s leading tin exporter, providing two-fifths of the world’s supply.

For the last few years, the Indonesian market has been jockeying to create its own alternative benchmark to the London Metal Exchange. As a result, huge changes have been made and the value of tin has varied significantly.

Recent regulations actually forced Indonesian tin exporters to trade ingots locally on the ICDX before they could export overseas. The move was intended not only to boost Indonesia’s influence in the market, but to curtail any illegal mining and trading.

The new regulations had a catastrophic impact. Shipments dropped a staggering 88% in the month of September and the state-owned tin company PT Timah declared a force majeure on 19 contracts it couldn’t fulfill because the customers weren’t registered on ICDX.

That sort of declaration is usually reserved for disasters like war, riots, earthquakes, hurricanes, and so forth.

PT Timah provides nearly a third of the country’s refined tin, and this kind of disaster triggered a major in upswing in the metal, driving prices to a five month high of $23,125 per ton.

Though the market hasn’t recovered from the regulations yet, ICDX said it will start offering its own tin futures next year, and that it will announce its strategies in the first quarter.

Once Indonesian producers and customers get on board with regulations, and ICDX opens up futures trading, the price of tin should continue its upward trend.

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