Marginal Influences to the Supply Side Serve as the Core of Pushing up Tin Prices

SHANGHAI, Oct 19 (SMM) - China produced 4971 of tin in July, down 12.3% from June. The cumulative output in Jan-Jul stood at 52,000 mt. At present, the Yinman Mining Co. has been resuming the production step by step, with an annual output of 7,200 mt in metal content.

The imports of tin stood at 15557 mt in August, down 10.29% from July. Among them, 12,500 mt of tin was imported from Myanmar, accounting for 80% of the total imports. The cumulative imports in Jan-Aug stood at 104,789 mt.

According to SMM, the tin ore production in Myanmar declined in July, mainly due to a month-long blockade of transport in Wa State County. And there were also no releases of reserves in the country in August. After the transport was unblocked in Myanmar, the amount of imported ore returned to normal in August, with China's tin ore imports reaching more than 15,000 mt in August. Looking ahead to the fourth quarter, there are still rumours in the market that Myanmar plans to release 5,000 mt of reserves.

As the conversion costs of tin ore in various regions continued to rise on the month, the domestic smelters’ profits began to be revised upwards. Some smelters began to raise their production plans, thus the overall tin ingot production has shown an upward trend month-on-month.

However, in the short term, the short electricity supply may become a new normal amid global energy crisis.

On the export front, the YTD exports of tin ingot has rose significantly amid overseas economic recovery in 2021, which hit a record high in recent years.

The export orders of tin plate has also grown steadily this year. While the high yield has pushed up the inventory of tin plate.

Meanwhile, SMM believes that the consumption in the fourth quarter still carries upside potential as the demand from the semi-conductor sectors in US and Japan has picked up in 2021.

Besides, the consumption of other tin-related products has demonstrated strong momentum compared to last year, and the market is generally bullish about the consumption market of tin.
According to SMM analysis, the inventory in overseas market has shown no signs of significant increase though the smelting activities overseas have been recovering; while there is also no significant increase in domestic inventory level though the production in China has been steady.

On the demand side, the prosperity of electronics, photovoltaic and new energy sectors have boosted the consumption estimate of tin, supporting tin prices from the fundamental side. As such, the tin prices are likely to move up further.