Frequent Macro Disturbances Led to Expected Tightening in Tin Mine Supply [SMM Tin Morning Meeting Minutes]

As layoff figures maintained low, the number of Americans filing for unemployment benefits decreased last week, potentially easing concerns about worsening job markets. The US Department of Labor announced on Thursday that initial jobless claims for the week ending August 31 fell by 5000 to 227,000 after seasonal adjustments, which is below the market's expectation of 230,000. The US Fed's Beige Book, released on Wednesday, stated that employment levels were "generally unchanged to slightly higher over the recent weeks." However, turning our attention to the domestic tin industry, we notice that the pressure on the supply side is gradually becoming more pronounced. According to in-depth market research data from SMM, domestic refined tin production in August 2024 showed a 2.87% MoM decrease. Although it marked a significant 45.64% YoY increase, the YoY decline is undoubtedly a noteworthy signal. Especially in Yunnan, the continuous decline in Myanmar tin mine imports has started to have a substantial impact on the smelting sector. SMM surveys further indicated that the amount of tin mine metal imported from Wa State, Myanmar, in August remained at a relatively low level. This situation has exacerbated the supply challenges for smelters, forcing some enterprises to adjust their production plans based on tin mine procurement levels. Against this backdrop, a slight decline in production is expected in the future. More critically, considering that a major smelter plans to conduct a 45-day maintenance shutdown, the national production of tin ingots in September 2024 is expected to decrease significantly by 31.15% YoY. Compared to the same period last year, this decline is as high as 30.98%. In summary, given the frequent macro disturbances and the tightening of both tin mine and tin ingot supply, we anticipate that SHFE tin prices may show an upward trend. Market participants should closely monitor the dynamics of domestic and international job markets and changes in domestic tin industry supply conditions to formulate reasonable investment strategies and countermeasures.