Supply Remains Low, Tin Prices Fluctuate at Highs [Institutional Commentary]

Last week, tin prices fell sharply, mainly due to the implementation of the US tariff hike policy on China, which intensified market concerns over escalating trade frictions and economic recession, coupled with rising expectations of the resumption of production at the Bisie mine in the Democratic Republic of Congo, leading to a surge in market risk aversion sentiment.

Supply side, refined tin production in March was 15,080 mt, up 10.4% MoM but down 3.1% YoY. Affected by tight raw material supply and low TC, production in April is expected to be 15,385 mt, down 8.3% MoM and 7.0% YoY. The latest customs data showed that cumulative tin ore imports from January to February were 18,587 mt, down 50.15% YoY. Cumulative tin ingot imports in the same period were 4,203 mt, down 16.61% YoY.

Demand side, domestic consumer electronics demand data weakened, and the US tariff policy may affect China's home appliance and consumer electronics exports. Subsequent observation is needed on the strength of domestic stimulus policies. Inventory side, domestic inventories remained at high levels overall, but last week's sharp decline in tin prices triggered restocking demand in the spot market, leading to a reduction in refined tin inventories.

In summary, tin demand is expected to weaken marginally, but supply remains at low levels, and SHFE tin prices are expected to fluctuate at highs.

Today, the price range for the most-traded SHFE tin contract is expected to be 250,000-270,000 yuan/mt, while the LME tin 3M contract is expected to range from $29,000-33,000/mt.

(Source: Minmetals Futures)