On the upstream side, Malaysia Smelting Corporation suspended production due to a pipeline accident at a natural gas supply company, which triggered supply concerns in the tin market, leading to tight upstream tin resources. The actual transaction price for 40% tin concentrates in Yunnan was concentrated at 11,000 yuan/mt, with even lower offers reported. Smelters operated with low raw material inventory levels, and attention was paid to changes in domestic smelters' production schedules in April. Meanwhile, news of resumption of production in Wa State was also monitored.
On the downstream side, the high absolute price led to a near halt in tin-related midstream and downstream pricing above 290,000 yuan. Domestic SMM tin social inventory continued to increase to 12,000 mt. Overseas LME tin inventory fell to 2,990 mt, with the ratio of cancelled warrants dropping to 24%. The LME 0-3 month spot premium expanded to a maximum of $264 last week, with the latest report at $254, indicating rising risks of a squeeze. However, judging from the absolute inventory level and near-month open interest in the LME, a short-term squeeze is difficult, but attention should still be paid to next month, as the total open interest for contracts expiring in the next two months remains at a relatively high level since July last year.
The global tin market is fully loaded with supply concerns. Under the broader trend, LME tin was not spared. A stronger rally in LME tin, which nearly challenged record levels, must be supported by demand resonance, but current consumption is moderate. As a small variety, tin is noticeably sensitive. The open interest attracted by bullish themes last week has largely flowed out. It is recommended that midstream and downstream players price on demand below 270,000 yuan. Among the non-ferrous metals sector, tin prices remain a high-volatility variety, and the trend direction still requires attention to supply-side developments.
(Source: SDIC Futures)
