[SMM Analysis] Impact of the Chinese New Year Holiday on the Tin Solder Industry: Low Operating Rate in Early 2025, Slow Recovery Ahead

SMM February 14 News:

Based on processing data from market exchanges, SMM reported that the domestic tin solder production of sample enterprises in January showed a significant decline compared to December. Meanwhile, the overall operating rate of the samples dropped to 53.26%, impacted by the Chinese New Year holiday. However, entering February, we expect the total sample production to rebound, with an estimated MoM increase of 32.46%. Correspondingly, the overall operating rate in February is also expected to recover to 70.55%.

In January 2025, production activities in the tin solder industry slowed significantly, primarily due to the extended Chinese New Year holiday. With most enterprises halting operations during the holiday, the actual number of production days was greatly reduced, resulting in a low overall operating rate. Although some end-user enterprises conducted small-scale inventory replenishment before the holiday, solder demand saw a significant decline compared to December 2023 due to holiday factors. Specifically, solder demand in January decreased by approximately 20%-30% MoM, reflecting the seasonal weakness in the market before the holiday.

From the perspective of the industry chain, downstream application sectors of tin solder, such as electronics manufacturing, automotive components, and home appliances, generally experienced a slowdown in production pace before and after the Chinese New Year. Particularly in the electronics manufacturing sector, a major consumer of tin solder, order volumes in January declined significantly, further exacerbating the sluggishness in the solder market. Additionally, fluctuations in raw material prices imposed certain pressure on the production costs of solder enterprises. Although tin prices remained relatively stable in January, companies still faced high operating costs.

Looking ahead to February 2025, the lingering effects of the Chinese New Year holiday are expected to continue suppressing production activities in the solder industry. Although some enterprises will gradually resume operations after the holiday, the recovery pace of end-user enterprises remains slow, leading to weak demand recovery for solder. Based on historical data and current market trends, solder order volumes in February are expected to remain at low levels, with limited MoM growth. Furthermore, considering the uncertainties in the global macroeconomic environment, particularly in international trade conditions and supply chain fluctuations, the recovery process of the solder industry may be relatively slow.

In the long term, as the impact of the Chinese New Year holiday gradually fades, the operating rate of the solder industry is expected to recover progressively in Q2 2025. However, this recovery process will be constrained by multiple factors, including the pace of end-use demand recovery, fluctuations in raw material prices, and changes in the macroeconomic environment. Therefore, solder enterprises need to closely monitor market dynamics and adjust production plans flexibly to address potential market risks.

In summary, from January to February 2025, the tin solder industry was significantly impacted by the Chinese New Year holiday, with overall operating rates and order volumes remaining at low levels. Although the market is expected to gradually recover in the future, the recovery process will likely be slow, and enterprises need to prepare for long-term market volatility.

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