SMM Tin Market Review and Forecast 2022-2023: Will Market Confidence Recover in 2023 after LME Tin Prices Lost 36% in 2022?

SHANGHAI, Jan 5 (SMM) - Tin prices constantly refreshed new highs in 2021 on the back of robust restocking demand and ample global liquidity.

However, tin prices experienced a nose-dive fall in 2022. After hitting a new record high of 395,000 yuan/mt on March 9, the most-traded SHFE tin contract moved all the way down, with a yearly loss of 27.87%. LME tin showed similar trend as SHFE tin, peaking at $51,000/mt on March 8 before going downhill, closing the year down 36.24%.    

Tin price review in 2022

First quarter: Tin prices stayed at above 300,000 yuan/mt as the market priced in supply tightness and demand recovery. However, high tin prices drove the supply to recover, with tin ore imports from Myanmar soaring YoY in Q1, paving the way for subsequent price pullback.  

Second quarter: Demand collapsed amid raging Covid outbreak in China, bringing tin prices down rapidly. 

Third quarter: Tin smelters began to undertake massive maintenance, but this failed to put a brake on the price downturn. Rising social inventory sent tin prices down to below 200,000 yuan/mt by the end of the quarter.

Fourth quarter: As imported tin flooded the domestic market, SHFE tin plummeted and was close to 150,000 yuan/mt. Subsequently, cost support, sharp fall in October tin ore imports, along with relaxed pandemic controls, drove tin prices up to 200,000 yuan/mt.    

The SMM #1 tin prices peaked at 368,500 yuan/mt on March 9 before falling, ending the year down 30.43%. 

Inventory

The domestic tin ingot social inventory added 4,318 mt in 2022, due to high smelter operating rates, sluggish consumption and massive inflows of imported tin.

LME tin inventory added 945 mt last year. 

Production

China’s tin production showed a V-shaped trend in 2022 and is estimated to rise 2,611 mt YoY.

Market outlook for 2023

At present, demand in the domestic spot market is sluggish, accelerating the growth of social inventories. On the other hand, from a global perspective, the supply growth of tin ore will be limited. The US Federal Reserve may slow down the pace of interest rate hikes. Consumer electronics market is expected to recover. With China lifting its Covid restrictions, market confidence has picked up. 
To sum up, the short-term tin prices will barely rise under the drag of weak reality. However, with the recovery of market confidence, tin prices are expected to regain upward momentum in 2023.