Inventory Accumulation Post the CNY Holiday Will Suppress Tin Prices

SHANGHAI, Jan 27 (SMM) - The entire tin industry chain participants will gradually be closed for CNY holiday as the festival is already around the corner. Meanwhile, the tin supply and demand have remained weak. The mainstream upstream smelters will mostly be shut after January 25, according to SMM. As such, the refined tin output in January will be less impacted by the holiday factor. And the smelters will intensively resume the production around the Lantern Festival, which is expected to have a greater impact on the output in February. SMM believes that the smelters’ output in February will drop to 11,540 mt.

The holiday season of downstream enterprises shows obvious regional differences. The holiday time in the Pearl River Delta region starts around the 20th of this month, and will end around the tenth of February. The enterprises in other regions will take the holiday later than those in the Pearl River Delta region, and will mostly resume the production earlier around February 8. Generally speaking, though the smelters will mostly be closed during the CNY holiday, some large-sized smelters that take up the largest shares of domestic tin output, will maintain the production during the holiday. As such, the output in February will drop only slightly from January.

On the demand side, the solder companies in SMM sample will see concentrated holiday period, hence the demand will drop more palpably during the holiday. There is higher possibility that domestic tin inventory will rise amid short-term supply surplus, weighing on tin prices.