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(under review) [SMM monthly outlook] multiple good news to support tin price trend it is expected that Shanghai tin will continue to maintain high and wide volatility in the short term.
Apr 30,2020 20:19CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

SMM4 30: April tin prices are basically in a rising trend, April 21, 22 and 28 although there have been two brief declines, but then the trend rebounded to recover lost ground. As of April 30 (the last trading day in April), the main company in Shanghai and tin closed at 127390 yuan / ton, up 5.03 percent from 121290 yuan / ton on April 1.

From a fundamental point of view, in addition to the macro level of unlimited quantitative easing in the United States and speeding up the construction of new infrastructure such as 5G in China, the tightening concerns on the supply side are also an important reason. Tin ore end raw material suppliers quote and ship less, smelter raw material supply is facing a tense situation, foreign countries due to the epidemic. Tianma, Alpha, Malaysia smelting Group, Minsu of Peru, AfriTin Mining of Namibia, Minera ã o Taboca, a subsidiary of Minsur in Brazil, and PT Timah, an Indonesian tin miner, have announced temporary production cuts or shutdowns.

However, while the supply side continues to be tight, the demand side is also declining. On April 8, the World Trade Organization (WTO) annual Global Trade data and Outlook report said that given the uncertainty of the economic impact of the epidemic, the volume of trade in almost all regions of the world will decline in double digits, and global trade may shrink by 13% to 32% this year, with exports in North America and Asia to be the hardest hit. In terms of the industry, trade in the electronics and car manufacturing industries will shrink even more. Due to the spread of the epidemic in the global impact of the electronic industry chain, so that it is in a state of semi-stagnation, and then reduce the demand for tin ingots. The weak pattern of demand side and supply side affected by the epidemic is still the main theme at present.

The major event of the month was the collection and storage of non-ferrous metal products in Yunnan in late April. On 24 April, the people's Government of Yunnan Province issued a circular on "several measures to support the development of the real economy." the first measure is to support key enterprises in carrying out commercial collection and storage of non-ferrous metal products. In accordance with the principle of "enterprise collection and storage, bank loans, financial subsidies, market operation, self-financing", the province's copper, aluminum, lead, zinc, tin, germanium, indium and other key non-ferrous metal products commercial collection and storage, the total amount of collection and storage is about 800000 tons, the collection and storage time is one year. The funds required for collection and storage shall be loaned to the bank by the enterprise in the form of product pledge. The provincial finance allocates 1 billion yuan in special funds to partially discount interest on bank loans to enterprises. Among them, 80% discount subsidies are given to enterprises that store tin, germanium and indium.

After the announcement of the notice, affected by the good news, such as collection and storage, led to the domestic Shanghai tin market trend that morning, a large number of short funds fled, significantly pushing up the Shanghai tin disk price trend, and then in the Asian session to drive the Lunxi electronic European market stronger, the day closed, the Shanghai tin main contract rose more than 3%. In the spot aspect, due to the sharp upward of the disk, downstream enterprises and traders are in a wait-and-see state, Shanghai and tin spot market buys light, the overall transaction atmosphere is weak.

SMM believes that from the perspective of Shanghai tin market, the 2005 contract is about to be delivered and exchanged, the 2006 contract position has been significantly reduced this week, the main contract has changed to 2007 contract. At present, the overall supply of tin ingots in tin city is not urgent. It is expected that the long and short sides of the 2006 contract will continue to leave or move, and the follow-up attention can be paid to the game situation of long and short forces. And affected by the position is relatively large, it is expected that the short-term Shanghai tin fluctuation range or maintain a relatively large state. Macroscopically, the overall trend of the recent tin market is still relatively affected by the macro level. Affected by the good news such as the confirmation of the dates of the recent two sessions and the collection and storage, it is expected that the possibility of a sharp decline in tin in Shanghai is limited. It is expected that tin in Shanghai may continue to maintain a high and wide concussion in the short term. The support level near 128000 yuan / ton is tested below the tin in Shanghai, and if the next support falls below the 20-day moving average of 126000 yuan / ton, The resistance level near 134000 yuan / ton is tested above.

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