[SMM Analysis] Tin Solder Demand Weakened in August But Started Well in September-October Peak Season

According to in-depth surveys by SMM, August tin solder production of domestic sample companies showed a 1.64% decrease MoM compared to July. At the same time, the overall operating rate of the sample companies also slightly declined, reaching 70.47%, down 1.18 percentage points from July. However, entering September, we predict a rebound in total production, with an expected increase of 4.33% MoM. Correspondingly, the overall operating rate in September is expected to rise to 73.52%, an increase of 3.05 percentage points from August.

In the solder industry, the market performance remained relatively mediocre in August. Most solder companies reported a certain degree of order decline, primarily due to reduced demand from end-users. Additionally, the significant rise in SHFE tin prices in August, from 238,000 yuan/mt to 268,000 yuan/mt, further suppressed the purchase willingness of end-user companies. Specifically, the photovoltaic industry did not see a significant recovery in order volume, leading to a decrease in overall production of downstream solder companies in August. It is worth noting that the continuous rise in tin prices in August prompted most end-user companies to utilize prior inventory for production, thereby reducing their stock levels.

However, with a significant drop in tin prices in September, this situation is expected to improve. We anticipate that the decline in tin prices will stimulate most end-user companies to increase procurement and conduct appropriate stockpiling. This trend has already begun to emerge, with some solder companies reporting increased orders at the beginning of September.

Looking ahead to the market trend in September, based on SMM forecast and in-depth surveys on the early September orders of downstream solder companies, we believe that the tin solder production of sample companies will exhibit a slight growth trend. This prediction considers the recent enhancement in purchase willingness of end-user companies and possible stockpiling demand before the National Day holiday. Considering these factors, we expect the order volume of tin solder companies to achieve a slight increase, with market performance likely to stabilize and rebound.