Is the price of tin likely to fall from a high level? International Tin Association: 6500 tons of pre-added global tin production capacity in 2022 [agency review]

In January, the tin market showed a weak situation of both supply and demand. Due to the Spring Festival holiday, the operating rate of smelters declined and the output of refined tin dropped sharply compared with the previous month. However, although exorbitant tin prices inhibit downstream consumption, companies prepare stocks in advance before the Spring Festival, aggravating the spot shortage, and global tin inventories are at a low level.

High tin price stimulates the increase of tin supply

In 2021, high tin prices spurred tin mine production to accelerate, and production increased in Indonesia, China, Peru, the Democratic Republic of the Congo and other countries. It is expected that Indonesia and the Democratic Republic of the Congo (DRC) mines will become the main suppliers of tin concentrate in 2022, and the production of related mines in Indonesia will return to normal levels. The International Tin Association predicts that the global tin mine will increase its production capacity by 6500 tons in 2022.

China is the largest tin producer in the world. Yunnan, Hunan and Guangxi are the three regions with the largest tin production in China, but they are also faced with the decline of the grade of old mines and the slow decline of output in the next few years. The Yinman Mining Industry in Inner Mongolia is the main growth part of the tin mining mountains in China. Domestic tin production is expected to remain stable this year.

Indonesia has continued to restrict or even ban the export of raw materials for commodities in recent years, and on November 23, 2021, the government said it might ban tin exports in 2024. Indonesia is the second largest tin producer in the world and the largest importer of refined tin in China. However, as Indonesia tends to develop deep processing of tin, all tin concentrates are processed in the country and exported in the form of tin ingots or tin alloys. Indonesian tin export policy has a great impact on China's tin market supply.

The price of tin concentrate is significantly higher with the price of tin, but the overall processing fee is low. as of January 28th, the average processing fee of 60% tin concentrate in Guangxi, Jiangxi and Hunan is 19000 yuan / ton. The average processing price of 40% tin concentrate in Yunnan is 23000 yuan / ton.

The output of refined tin will keep increasing this year.

According to SMM data, China's refined tin production will be 165200 tons in 2021, an increase of 10.43% over the same period last year. In the middle of 2021, the domestic refined tin output decreased due to power restriction and other factors, but since then tin prices and processing fees have risen sharply, and the production enthusiasm of smelters has increased. In December last year, China produced 14000 tons of refined tin. In January, due to maintenance and the Spring Festival holiday, the operating rate of smelters decreased, and China's refined tin production is expected to be 1285 tons in January this year, a decrease of 1515 tons compared with the previous month. In addition, SMM expects refined tin production to reach 169000 tons in 2022, an increase of 4000 tons.

Overseas, the tin production of (MSC), a Malaysian smelter group, dropped sharply in 2021. At the end of April, several furnaces in MSC were malfunctioning and overhauled; at the beginning of June, production was suspended due to force majeure; at the end of August, MSC resumed production by 80%; full production resumed on November 30th. However, tin production increased in Indonesia, China, Peru and Bolivia last year. The International Tin Association expects global refined tin production to increase by 27500 tons to 394400 tons in 2022.

There is a strong demand for electronic products.

In 2021, the orders of domestic tinplate enterprises are sufficient, and the output increases as a whole. According to the data, the output of tinplate in China will be 1.35 million tons in 2021, an increase of 120000 tons over 2020 and an increase of 9.76 percent over the same period last year. From January to November 2021, China's net export of tinplate was 1.1736 million tons, an increase of 16.9 percent over the same period last year.

Since the epidemic, home work, online meetings and entertainment have brought explosive growth in demand for electronic products, boosting tin consumption. According to the National Bureau of Statistics, in 2021, China produced 485 million computers, an increase of 22 percent over the same period last year, and 1.272 billion smartphones, an increase of 9 percent over the same period last year. With the support of policies, China's integrated circuit industry has developed rapidly, with an average annual growth rate of 15% in the past 10 years. In 2021, China's output of integrated circuits was 359.43 billion, an increase of 33.3% over the same period last year, and the growth rate reached a new level.

According to the China Federation of Electric Power Enterprises, from January to November 2021, the installed capacity of photovoltaic in China was 34.83GW, an increase of 34% over the same period last year. Due to the late release of domestic targets and the sharp rise in raw material costs, the new installed capacity of photovoltaic will be reduced from the original 55GW~65GW to 45GW 55GW in 2021, and it is expected to reach 75GW in 2022.

The International Tin Industry Association predicts that in 2022, the amount of tin used in the photovoltaic industry is expected to reach 16000 to 19000 tons. By 2025, the amount of tin used in the photovoltaic industry will continue to increase at an average annual growth rate of 25% to 40%. It will grow into a tin consumption market with an annual tin consumption of tens of thousands of tons.

Original title: "Tin prices may fall at a high level"

Author: Liu Chongna

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