Supply Remains Uncertain, SHFE Tin Trades Within a Range [April 11 SHFE Market Closing Commentary]

SHFE tin experienced reduced volatility today after significant fluctuations yesterday, with the futures market initially declining before rebounding. The most-traded contract rose by 3.62%, closing at 257,450 yuan/mt. The resumption of operations at the Bisie mine in the DRC has alleviated the tight supply of tin ore, but the supply remains constrained until the resumption of tin mines in Myanmar. In the short term, tin prices are expected to follow the fluctuations of the non-ferrous metals sector.

Since Q1, domestic and overseas tin ingot inventory trends have diverged. Domestic social inventory has continued to accumulate due to high tin prices suppressing demand and relatively high production levels, while LME inventory has been declining due to low supply. This week, tin prices experienced a significant decline, leading to improved spot trade in the domestic market. Social inventory of tin ingots is expected to destock, and the overall performance of tin fundamentals will depend on when tin mines in Myanmar resume production, given the resilience in consumption.

Recently, tin prices bottomed out and rebounded, with some smelters holding back cargoes, resulting in limited actual transactions. Traders actively sold goods, reporting active downstream inquiries and stockpiling at low prices, leading to heated spot trades. Downstream feedback indicated significant price volatility, with some end-users remaining cautious while others entered the market to stockpile at low prices, primarily for just-in-time procurement. Overall order conditions have slightly improved, but future consumption strength will depend on downstream order-taking and subsequent production.

Regarding the future market, Galaxy Futures commented that Indonesia's tin export policy, shifting from a single rate to a cumulative rate (significantly higher), may soon be implemented. The final policy situation will be closely monitored, as the rate increase could significantly impact local mining costs. Currently, LME tin prices remain below the levels before the rise caused by the suspension of tin mines in the DRC. With the easing of overseas macro panic sentiment and ongoing supply uncertainties in Myanmar and Indonesia, although the supply-demand imbalance has marginally weakened, the downside for tin prices is expected to be relatively limited.