At the macro expectation level, the holiday, the poor economic data released by the United States hit the dollar lower, and the latest comments from Federal Reserve officials adjusted the market's expectations for the timing of interest rate cuts. At the same time, the growing uncertainty in the international political and economic arena and the escalation of geopolitical tensions have further exacerbated the market instability, which has had an important external impact on tin prices.
Boosted by the macro situation, the main Shanghai tin company has shown an upward trend since April, and on April 22, it has fallen back to a new high of 286,690 yuan/ton since May 23, 2022, with a monthly increase of 14.98%. The same is true for Lunxi, which rose to a new high of 36,050 yuan/ton since June 10, 2022 on April 22 and then gradually declined, with a monthly increase of 13.43%.
Changes in the trend of Shanghai and London tin futures:
Spot prices
In April, the average spot price of SMM 1# tin was "first up and then down", and it was reported at 262,500 yuan/ton on April 30, up about 16.28% month-on-month. Entering May, the latest SMM survey on the 6th showed that the purchasing willingness of downstream enterprises was still good, and most trading companies responded that the morning transaction was about 10-20 tons, and the spot inventory of some trading enterprises was low, and the overall transaction in the spot market was more active.
SMM1# tin spot average price change trend:
Supply side
Tin mines: In April, the Wa State Bureau of Industry and Minerals issued two notices on mining areas, emphasizing that all mines in the Manxiang area need to strictly comply with the Wa Central Economic Planning Commission's regulations on work stoppage and production stoppage, and if they violate the regulations, they will be held legally responsible. At present, the expected disruption of tin ore supply still exists.
In terms of output: According to SMM research, 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 production schedule of a few smelters has increased 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 output to be 16,555 tons in April, up 6.42% month-on-month and 10.71% year-on-year.
Changes in domestic refined tin output:
inventory
Domestic: Since April, the total social inventory of tin ingots in different regions in China has shown an overall trend of accumulation, and as of April 26, the inventory has increased by about 1,800 tons month-on-month. Downstream enterprises have conservative procurement strategies and choose on-demand procurement.
LME inventory: LME tin inventory in April as a whole showed a trend of first decreasing and then increasing, and the inventory on April 30 increased by about 240 tons month-on-month. Indonesia's tin ingot exports have gradually returned to normal, and the supply shortage has eased.
Changes in the total social inventory of tin ingots in China by region:
On the demand side
According to SMM research, it is expected that the operating rate of tin solder enterprises in April will be basically flat month-on-month. Most downstream solder companies reported that the order volume in April was relatively stable and not affected by the holiday factor. However, a small number of companies said that the 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 domestic tin ingot production on the fundamental supply side is expected to be stable, and the supply of tin ore in Wa State is expected to be tight, the domestic tin ingot inventory is still at a high level, and the operating rate of downstream tin solder enterprises on the demand side may remain stable. SMM expects that in the short term, Shanghai tin prices may fluctuate, pay attention to the macro situation, domestic tin ingot inventory, London tin price trend and news from Wa State in Myanmar.