Yunnan's tin smelters to cut output on tight supply

SHANGHAI, Mar 30 (SMM) – Eight tin smelters in Gejiu city, Yunnan province, plan to cut production by at least 20% in 2018 as supplies of tin ore tightened, SMM learned. This is also in response to high costs and low prices of tin. 

Processing charges fell across major tin producing areas in Yunnan this week. For ore with 40% Sn content in Gejiu city, the processing fee stood mostly at 16,000-17,000 yuan/mt, down some 1,000 yuan/mt from two weeks ago. In other cities of Yunnan, processing charges for ore with 60% Sn content mostly stood at 13,000 yuan/mt, down 500 yuan/mt from two weeks ago.

Tin prices have fallen 5,000 yuan/mt from late February. Equipment expenses and taxes for environmental protection also added to costs for smelters.

Smelting firms, including Yunnan Chengfeng and Gejiu Zili, will reduce output by over 20% this year. Some declared a cut of 25-30% in 2018. Output of Gejiu Zili stood at 660 mt in March, down from 860 mt in February. 

According to the International Tin Association, China's imports of tin ore from Myanmar is expected to drop 15,000 mt in metal content this year. Only 2,000 mt of ore in metal content is estimated to be imported in March, compared with an average import volume of 5,000-6,000 mt per month last year.

Pressure on supply is likely to persist till April at the least, SMM learned. Affected by this, traders in the spot market also raised offers on Friday March 30. We see an uptick in tin prices as supply continues to tighten in the short term. 

For editorial queries, please contact Daisy Tseng at daisy@smm.cn 
For more information on how to access our research reports, please email service.en@smm.cn