Today, the futures prices of Shanghai and London fell sharply, as the bulls closed their positions with short-term profits after a wave of sharp gains. In the afternoon, the main Shanghai tin continued to weaken, as of the end of the day fell 9.02%, compared with the closing price on March 29, the maximum increase in April was about 25.69%, and the decline of London tin was slightly smaller than that of Shanghai tin, down 5.33% as of 15:18.
Changes in the trend of Shanghai and London tin futures:
Spot prices
Stopping three consecutive gains, the average spot price of SMM 1# tin today fell sharply, down 5.78% from the previous day to 265,000 yuan/ton.
According to SMM research, tin prices have fallen sharply, and downstream enterprises have increased their willingness to purchase, and they have purchased and replenished their warehouses. Most trading companies responded that 10-30 tons were traded in the morning, and the overall transaction in the spot market picked up.
SMM1# tin spot average price change trend:
Supply side
In terms of production: Recently, the Wa State Bureau of Industry and Minerals issued two notices on the issue of mining areas, emphasizing that all mines in the Manxiang area need to strictly abide by the relevant documents of the Wa State Central Economic Planning Commission on the suspension of work and production, and if they violate the regulations, they will be investigated for legal responsibility. At present, the expected disruption of tin ore supply still exists.
In April, a small number of smelters in Yunnan plan to gradually resume production, and the output is expected to rebound to the level of the previous year; most smelters in Jiangxi are expected to maintain normal production, and the output of a few smelters is expected to increase slightly, and it is estimated that the output of refined tin will increase slightly in April; a smelter in Hubei has stopped production in late October 2023 due to the shortage of waste procurement; and most smelters in other regions have basically maintained normal production. SMM expects domestic tin ingot production to increase by 6.42% month-on-month and 10.71% year-on-year in April.
Changes in domestic refined tin output:
inventory
Domestic: At present, the total inventory of tin ingots in different regions in China is still at a high level, and the inventory last week (April 19) was 7 tons compared with the previous week (April 12). High tin prices to a certain extent inhibit the purchasing enthusiasm of downstream enterprises, under the pressure of continuous upward tin prices, most companies will not actively replenish inventory, but due to their own low inventory level, just need to purchase one after another. Last week, most trading companies responded to the general transaction, and at the same time, with the continuous rise in tin prices, the spot discount of trading enterprises gradually increased, which had a certain stimulating effect on the actual transaction. Last week, the overall transaction in the spot market was average, and most of them were just needed to buy.
LME inventories: At present, LME tin inventories are at a low level, with 100 tonnes of tin inventories last week (April 19) compared with the previous week (April 12). This week continued to go to stock, and the inventory on April 22 was 25 tons lower than last week (April 19), coming from the Port Klang warehouse.
Changes in the total social inventory of tin ingots and LME tin inventory by region:
On the demand side
The rapid development of the AI sector, as well as the increase in demand for photovoltaics and new energy vehicles, provided support for tin prices. According to SMM research, it is expected that the operating rate of tin solder companies in April will be basically the same as that in March. Most downstream solder companies reported that the order volume in April was relatively stable and was not affected by the holiday factor.
However, a small number of companies said that the recent continuous rise in tin prices has had a restraining effect on the willingness of terminal companies to place orders, so the overall order volume may decline to a certain extent compared with March. Despite this, judging from the overall trend, the output and operating rate of downstream tin solder enterprises are still expected to remain stable in April.
SMM outlook
On the whole, the supply of fundamental tin ore is expected to be tight, and the output of downstream solder enterprises on the demand side is expected to be stable, and the domestic tin ingot inventory decreased last week. The trend of tin prices in the future market needs to pay attention to the domestic tin ingot inventory, the price trend of London tin, and macro news.