Tin Market Turmoil: SHFE Tin Prices Fluctuate Amid Multiple Interwoven Factors [SMM Tin Morning Meeting Summary]

SMM Tin Morning Meeting Summary on January 20, 2025

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 pulled back under selling pressure, ultimately closing lower compared to the previous trading day. Supply side, refined tin production in December decreased by 4.41%. With the Chinese New Year approaching, production is expected to continue declining, as the operating rate of refined tin smelters in Yunnan and Jiangxi provinces dropped to 61.19%, indicating increased pressure on raw material supply. Demand side, the recovery expectations in the new energy and electronics industries remain optimistic, particularly with the growing demand for tin in the EV and renewable energy sectors, which is expected to support tin prices in the medium and long term. However, in the short term, market sentiment has turned cautious due to low inventory levels and policy changes. In the spot market, transactions were relatively mediocre, with most traders engaging in scattered deals. Some imported tin arrived at ports, but due to high pre-sale volumes, spot imported tin remained relatively tight. Coupled with the year-end approaching, most traders held low inventory levels, which may lead to tighter spot availability in the future. Recently, SHFE tin prices saw a significant rally driven by macroeconomic factors, particularly after the Ministry of Commerce announced subsidies for purchasing new home appliances and digital products, further stimulating end-use demand. Nevertheless, downstream enterprises showed limited enthusiasm for purchases, with most opting to wait for further price declines before restocking. Given the combined influence of domestic and international economic conditions, policy adjustments, and supply-demand dynamics in the tin industry, SHFE tin prices are expected to maintain a fluctuating trend in the short term. Investors should closely monitor global economic data, domestic economic policies, and changes in industry demand to better navigate market dynamics and mitigate risks.