Market Sentiment Continued to Recover, SHFE Tin Fluctuated Upward [SHFE Market Closing Commentary on April 11]

Trade tensions have eased, and market sentiment continues to recover. Non-ferrous metals generally rose, with SHFE tin fluctuating upward. The most-traded contract closed up 3.02% at 261,850 yuan/mt. Although African tin mines have resumed production, tin ore supply remains tight. Subsequent attention needs to be paid to the pace of resumption in Myanmar and the progress of the conflict in the DRC region.

According to SMM's in-depth market survey data, as of last Friday, the operating rates of refined tin smelters in Yunnan and Jiangxi, two major tin-producing provinces, experienced a certain decline, with a combined operating rate of 56.75%. Yunnan region: The raw material supply chain crisis has intensified, and the inventory cycle of tin smelters continues to decline. Jiangxi region: The recycling system has malfunctioned, coupled with shrinking demand, leading to a structural break in scrap supply. The recycling volume of tin in Jiangxi decreased by 10% compared to the Q4 average, and the cost of scrap sorting has risen. The recycling system still exhibits the cyclical issue of "stockpiling in peak season and drying up in off-season." Last week, SHFE tin prices fell sharply due to tariff issues, and the willingness to sell among refined tin smelters in Yunnan and Jiangxi was low, showing a sentiment of holding back cargoes.

Last week, influenced by macro factors, when tin prices fell to around 255,000 yuan/mt on April 9-10, a wave of restocking emerged. The disappearance of the arbitrage space between futures and spot prices triggered smelters to hold back cargoes. Traders actively sold, reporting a surge in downstream orders stimulated by low prices, but end-user orders were mainly just-in-time procurement. Downstream buying the dip led to a significant destocking of tin ingot social inventory. Last week, LME tin inventory first rose and then fell, with the latest inventory dropping to 3,140 mt. Overall, recent inventory has remained stable.

Regarding the future market, Jinrui Futures commented that the recent significant weakening of the US dollar is favorable for metal prices. Domestic immediate smelting raw materials still face pressure, but the resumption of production in the DRC is expected to weaken future raw material imbalances. On the consumption side, recent price fluctuations have led to a renewed weakening in downstream procurement. Looking ahead to short-term prices, considering that the short-term macro impact has not yet ended, prices may still have room for a pullback.