Review of domestic and foreign tin markets in the first half of this year

In the first half of this year, the COVID-19 epidemic was still stirring up waves in some countries around the world. Novel coronavirus's mutant "Delta" (Delta) was first discovered in India and was officially named by the World Health Organization in May this year, and the epidemic has also occurred repeatedly in some parts of the country. In order to deal with the impact of the epidemic on the economy, the United States formally launched an economic stimulus package of US $1.9 trillion, which not only makes the world liquidity abundant, but also good for the basic metals market. China's economy has a good momentum of growth, with GDP rising 12.7% in the first half of the year compared with the same period last year. Tin market prices at home and abroad rose all the way in the first half of the year.

International market

(1) Price trend

In the first half of the year, the trend of LME tin March futures continued its rise since the second half of 2020 and reached its highest level in the past decade. Prices rose from $20970 a tonne to $26915 a tonne from the beginning of January to the end of February and have since adjusted to a relative low of $23775 a tonne in early March. After that, prices opened up the slow climb, closing at $31070 a tonne at the end of June. The three-month futures price of LME tin rose 48.16 per cent in the first half of the year, ranging from US $20710 / tonne to US $31725 / tonne, with an average price of US $26393 / tonne, up 65 per cent from a year earlier. The reason for the rise in prices in the international market in the first half of the year was due to the continuation of loose monetary policy and increased vaccination efforts in various countries to make the recovery of major economies obvious. LME inventories increased 9.7 per cent from 1860 tonnes to 2040 tonnes.

Data source: Minmetals Economic Research Institute

(2) the relationship between supply and demand

According to the report released by the World Bureau of Metals Statistics ((WBMS)), the global refined tin production from January to May this year is 175500 tons, and the demand is 176900 tons, which is slightly short.

Industry trends

1. Indonesia's refined tin exports decreased in the first half of this year compared with the same period last year

Data source: collated on the basis of public information

Indonesia's exports of refined tin totaled 32488 tons in the first half of this year, down 2.75% from a year earlier, according to data released by Indonesia's Ministry of Trade.

two。 Kyrgyzstan may develop two tungsten and tin deposits in Issyk Lake Prefecture

The representative office of the Issyk Lake State Assembly of Kyrgyzstan held a meeting to announce matters related to the development of tungsten and tin mines. It is reported that the related companies will develop the Trudavoye tungsten-tin mine and the Wuqi-Kashkong tungsten-tin mine located in Issyk Lake, with a total concession area of 1.77 square kilometers. Among them, Truda Voye tungsten-tin deposit has tin reserves of 149200 tons and a grade of 0.58%. Wuqi-Kashi empty tungsten and tin deposit has B+C1+C2 tin reserves of 60600 tons and a grade of 0.53%.

II. Domestic market

(1) Price trend

In the first half of the year, the closing price of tin futures on the Shanghai Futures Exchange also continued its rising trend since the second half of 2020. From the beginning of January to the end of February, prices rose from 152840 yuan / ton to 191260 yuan / ton. Since then, prices have fallen to a low of 170000 yuan / ton in mid-March. After that, it rose slowly, closing at 216130 yuan / ton at the end of June, an increase of 41.41%. The lowest is 154350 yuan / ton, the highest is 192770 yuan / ton, and the average price is 170181 yuan / ton, up 30% from the same period last year. The rise in prices in the domestic market in the first half of the year was due to the increase in prices in the international market, the impact on Myanmar's tin imports due to the closure of the Ruili Port in Yunnan due to the epidemic, and the reduction in production due to environmental inspections in Yunnan, Jiangxi and Anhui. Inventories in the previous period fell from 5574 tons to 3083 tons, a sharp decrease of 45 per cent.

Data source: Minmetals Economic Research Institute

(II) Import, export and production data

Customs statistics show that from January to May this year, China imported 71900 tons of tin concentrate, equivalent to about 19000 tons of metal, an increase of 14.7 percent over the same period last year. Imports of refined tin were 2467 tons, down 68% from the same period last year. Exports of refined tin were 6662 tons, an increase of 244% over the same period last year, and net exports have been maintained for five consecutive months so far this year. In the same period, China's tin concentrate production was 34282 tons, down 2.32 percent from the same period last year, according to the China Nonferrous Metals Industry Association. Refined tin production was 96780 tons, an increase of 45 per cent over the same period last year.

III. Outlook for the second half of the year

From a macroeconomic point of view, the COVID-19 epidemic still occurs one after another around the world, but the momentum is much slower than last year, vaccination work in major economies continues to advance, and market confidence in economic recovery has been enhanced. In early June, the World Bank predicted in its Global Economic Outlook report that the global economy would grow by 5.6% this year, 1.5 percentage points higher than the revised forecast for January, which would be the fastest growth rate in the world after the recession in 80 years. The increase in market confidence will help lead to a pick-up in demand in the overall commodity market.

Specific to the fundamentals of the tin market, on the supply side, industry insiders say that at present, the main tin producing areas in Myanmar are still facing a shortage of workers, which may intensify due to policy controls. Tin concentrate production is only likely to remain at around 1500-2500 tons in the coming months. In the longer term, the low import supply of tin ore will continue. On the demand side, due to the high price of tin, demand will be suppressed to a certain extent.

Against the above background, we believe that tin prices will show a high volatility trend in the second half of the year, buyers will adopt a buy-as-you-go strategy, while sellers will not easily reduce prices. It is expected that Lunxi will operate in the range of US $2.55-29500 per ton in the second half of the year, while Shanghai Tin will adjust and fluctuate in the region of 17-210000 RMB / ton.