SMM survey: the impact of power rationing on the tin industry chain
Regions under power rationing
Guangdong, Guangxi, Yunnan, Jiangsu, Zhejiang
Summary of power rationing policies
Jiangsu: From September 16 to 30, all companies are requested to reduce their production by “closing for 4 days in a week”, “closing for 8 days during the designated period” or “reducing the total production by 60%”.
Impact on the supply side and SMM analysis
The current round of power rationing has little impact on upstream smelters. A smelter in Guangxi has already reduced its output to a low level during the last round of power rationing in summer. Therefore, the actual impact of this round is insignificant, and the plant has gradually resumed production recently according to market news. The overall impact in Yunnan is insignificant. A factory in Hubei has suspended production for one month due to environmental protection.
Impact on downstream operating rates and SMM analysis
The recent power rationing in Guangdong and Jiangsu has had a greater impact on downstream solder and electronics factories, the largest source of demand. Many companies have continued to reduce their production due to problems such as high raw material prices and sluggish exports. And this round of power rationing has brought more difficulties to production.
Impacts on the terminal side and voice of companies
The electronics industry has been greatly affected by the power rationing. Photovoltaic companies have been gaining momentum recently, which worth market attention regarding their performance after the end of the power rationing.
Impacts on the prices and SMM analysis
The increase in tin prices for more than half a year has had a significant impact on downstream companies. According to the latest survey results, the downstream solder companies that supply electronics factories failed to see increased production in the seasonal high in September and October. Although the demand from photovoltaic companies has made up of the sluggish demand from electronics companies to a certain extent, the follow-up sustainability will remain as the focus. Therefore, under the expectation of sufficient supply, the degree of recovery of demand after the end of power rationing in the future has become the key to the absolute trend of tin prices.
YTD price change