[SMM Analysis] Approaching Off-Season, May Orders for Tin Solder Producers Were Lower than Expected

According to an SMM survey, domestic tin solder production of sampled companies in May was 9,142 mt, down 2.38% MoM. The operating rate of sampled companies was 77.47%, a decrease of 1.89 percentage points from April. The total output of sampled producers for June is expected to be 8,899 mt, down 2.66% MoM, with the operating rate expected to be 75.42%, a drop of 2.06 percentage points from May. In May, downstream and end-users maintained a relatively stable production. However, during the same period, SHFE tin prices showed a gradual strengthening trend. As a result, orders received by downstream companies decreased to some extent compared to April. Some end-users temporarily halted procurement due to costs, thereby postponing or canceling orders originally planned for May. Additionally, affected by the significant rise in tin prices after the Spring Festival, these companies were more cautious in procurement, mainly opting to make purchases as needed and continuously shortening the overall inventory cycle to mitigate price fluctuation risks.

For the solder industry, the market in May was relatively complex. Although orders of some downstream companies met expectations, many solder producers reported that the orders did not meet previous expectations, showing a certain degree of drop. Particularly, the reduction in scheduled production in the photovoltaic industry significantly impacted the orders of some solder producers. Entering June, according to the latest SMM survey, the operating rate of tin solder producers is expected to decline to some extent compared to May. Most downstream solder companies indicated that orders are expected to continue to show a slight downward trend during the off-season. It requires related companies to adjust their production strategies more flexibly to cope with the ever-changing market demand.