Supply Side Gradually Tightens, SHFE Tin May Maintain a Volatile Pattern During the Chinese New Year Holiday [SMM Tin Morning Meeting Summary]

SMM Tin Morning Meeting Summary on January 13, 2024

Last week, the tin market exhibited volatility and uncertainty, with SHFE tin prices experiencing significant fluctuations under the interplay of bullish and bearish factors. In the international market, tin price movements, domestic supply and demand conditions, and macroeconomic data collectively influenced market trends. Specifically, the price of the most-traded SHFE tin futures contract initially rose after the New Year opening but later faced selling pressure and pulled back, ultimately closing lower compared to the previous trading day. Supply side, refined tin production in December declined by 4.41%. With the Chinese New Year approaching, production is expected to continue decreasing. The operating rates of refined tin smelters in Yunnan and Jiangxi provinces slightly dropped to 63.04%, while processing fees continued to decline, indicating increasing pressure on raw material supply. Demand side, the recovery expectations in the new energy and electronics industries remain optimistic, particularly in the EV and renewable energy sectors, which are driving tin demand growth and supporting tin prices in the medium and long term. However, in the short term, factors such as low inventory levels and policy changes have led to cautious market sentiment. In the spot market, transactions were relatively mediocre, with most traders engaging in scattered deals. Some imported tin cargoes arrived at ports, but due to high pre-sale volumes, spot imported tin remains relatively tight. Coupled with the approaching year-end, most traders hold limited inventories, which may lead to tighter spot supply in the future. Recently, technical indicators for SHFE tin prices have weakened, suggesting insufficient upward momentum in the near term. However, the gradual tightening of the spot market will provide some support. In the coming period, investors should closely monitor global economic data, domestic economic policies, and changes in industry demand to better grasp the trends in SHFE tin prices while guarding against potential risks. With the combined influence of domestic and international economic conditions, policy adjustments, and the supply and demand dynamics of the tin industry, SHFE tin prices are expected to maintain a fluctuating trend in the short term. Investors are advised to remain cautious and stay updated on market developments.