High inventories, poor demand lower Shanghai tin prices

SHANGHAI, Jul 3 (SMM) – High inventories continue to weigh on prices, as US-China trade disputes and other macroeconomic developments dampened demand and grew tin inventories across China and international markets in June.

SMM retains a bearish outlook on tin fundamentals as downstream markets begin a slow season in July. Technical adjustment and smelters holding from offloading cargoes on lower prices are expected to underpin prices after the slump. 

China's tin market saw both slow demand and supply in the year to June. Lower imports of tin ore and falling treatment charges (TCs) for concentrate deterred production of refined tin in China.

Data showed that tin stocks across LME-approved warehouses accumulated 5,520 mt, or 620% from two months ago, to stand at 6,410 mt. SHFE tin inventories remained above 8,000 mt as of June 28, and in-plant stocks across SMM surveyed smelters stood above 4,500 mt.

The most-liquid SHFE September contract slipped for two consecutive trading days as of Wednesday July 3, to its lowest since November 2016, at 127,780 yuan/mt, as shorts aggressively loaded up positions amid global expanding inventories of tin.

Declines during July 2-3 once reached 10.2%. As shorts surged, open interests in the SHFE September contract grew 3,568 lots to 49,316 lots as of closing on Tuesday July 2.