SHANGHAI, Mar. 13 (SMM) – Analysts and traders expect China’s refined tin imports to fall this year due to the high domestic inventories and increasing output.
Tin imports in China, the world’s largest tin consumer and producers, hit a record high in 2012, placing pressure to global tin supply, and driving LME tin prices to gain 22% through the year.
China saw tight tin supply in 1H 2012 as a large amount of tin smelters closed after the environmental protection inspections, raising domestic tin prices and causing traders to import high quality refined tin.
Cui Lin, analyst of International Tin Research Institute (ITRI), said China’s tin inventories increased as much as 18,000 mt last year, and domestic tin prices will below LME tin prices in the next few months.
LME spot tin prices increased nearly 1% this year, while China’s tin prices were lower than LME tin prices despite a 2% increase so far this year.
A Yunnan-based smelter expected a decline in low-grade tin imports this year, noting that it has not purchased any goods from oversea market.
The smelter used to import low-grade tin from Indonesia to produce high-grade tin ingot, with 10-15% of its 16,000 mt output made from imported tin in 2012.
SMM analyst Wu Xiaofeng pointed out that tin consumption did not show noticeable recovery after the Chinese New Year, and capacity utilization for large tin smelters was around 60-70%, while that for smaller smelters was only 30%.
Manager from a Yunnan-based smelter expects tin demand to remain weak till May, and Cui believes demand should pick up in 2H this year with China and global economy recovering more quickly.
ITRI believes China’s refined tin consumption will rise 3.4-4.1% to 151,000-152,000 mt this year.
Antaike predicts China’s tin output will increase 4% in 2013 while demand is expected at 156,000 mt.
The massive production halts in 2012 caused a decline in tin production last year, but tin output is expected to rise in 2013. According to Antaike, refined tin output should be up 3.3% to 157,000 mt this year, compared with 2012’s 152,000 mt and 2011’s 160,000 mt.
ITRI expects tin output to increase 5.3% to 160,000 mt.
China’s imports of refined tin and tin alloy totaled a record 31,334 mt through 2012, while imports in January 2013 were up 48% YoY. This was partially because the Chinese New Year fell in January last year.
Edited by SMM