SHANGHAI, Feb 22 (SMM)—The most-liquid SHFE 2104 tin contract soared by nearly 8% to break above the 190,000 mark as of 10:20 Beijing time on Monday February 22, registering new record highs. Tin prices jumped from the 160,000 mark to the 190,000 mark and rose close to 200,000 yuan/mt in the three trading days after the Chinese New Year (CNY) holiday. The contract extended gained in the afternoon trading, rising by 8.68% to 194,120 yuan/mt as of 13:40 Beijing time.

Its LME counterpart also cruised higher, offered at $26,465/mt as of 10:30 Beijing time. Although LME tin stocks expanded, concerns over tin supply sustained, which boosted LME tin. Despite the political turmoil in Myanmar that affected transportation at some ports, shipments of tin ore have recovered currently, but transport has still been limited by Covid-induced restrictions. Myanmar's tin ore exports are expected to stand at about 2,000 mt (tin content) per month in January and February, but fast-rising tin prices are likely to encourage local mining of low-grade raw ore. Tin ore shipments from Myanmar are likely to increase after April-May. Other major tin producing countries are still suffered from the COVID-19 pandemic and shortages of containers, and cannot quickly replenish LME tin stocks.

Yinman Mining stopped production in early February due to a sudden employee death accident, and its time to resume work has not yet been determined. The company plans to increase its monthly output to 1,000 mt in 2021. 

Tin prices to rise before falling in 2021

Overseas supply of tin ingots and domestic supply of tin ore which are unlikely to rise rapidly will continue to support tin prices in Q1. Consumption of tin solder, the largest downstream user of tin ingots, was supported by semiconductor, photovoltaic, and 5G sectors. In addition, demand from European and American markets has started to recover as vaccine rollouts progress well, which will accelerate declines in tin inventories.  

However, China's tin ore imports from Myanmar are expected to rise after Q2, and tin ingot output in Indonesia and Malaysia is likely to rebound as the pandemic is further under control.