Beware of Wa State's Production Resumption Progress; SHFE Tin May Maintain Sideways Movement [SMM Tin Morning Meeting Summary]

March 10, 2025 SMM Tin Morning Meeting Summary

International macro front, the US February ADP employment data fell significantly below expectations, putting pressure on the US dollar index, which pulled back to around the 104 mark. Coupled with the announcement of Germany's large-scale infrastructure plan, this drove the overall rise in the non-ferrous metals sector. During China's Two Sessions, the government work report proposed multiple growth-stabilizing policies, including a fiscal deficit rate planned at 4% and the issuance of over 11 trillion yuan in new special and local government bonds. Market expectations for growth-stabilizing policies heated up, and Chinese assets generally closed higher. However, as the policy statements did not exceed expectations, the market maintained a cautious attitude toward macro guidance, limiting the upside room for tin prices.

From the perspective of the domestic tin ore market, overall, the supply side remains uncertain. Although there is an expectation of resumed production at Wa State tin mines in Myanmar, actual resumption requires a three-month preparation period, leaving the short-term tight supply situation unresolved. The escalation of M23 armed conflict in the DRC threatens local tin ore transportation, further exacerbating supply uncertainties. Domestic smelters' operating rates remain low, spot market circulation is tight, LME tin inventory continues to decline, while domestic social inventory buildup is evident. On the demand side, downstream enterprises have increased just-in-time procurement, and spot market orders have risen. However, overall consumption recovery still requires time for validation. Demand growth in the electronics and new energy sectors supports tin prices, while traditional consumption sectors remain weak, and market sentiment remains cautious.

In summary, forecasting tin price trends, SHFE tin is expected to fluctuate rangebound between 255,000-265,000 yuan/mt in the short term. Supported by favourable macro factors and low inventory, prices may maintain a relatively strong trend. However, attention should be paid to the progress of Wa State's production resumption and the risk of pullback caused by insufficient downstream consumption sustainability. Investors are advised to monitor signals from Two Sessions policies boosting industrial metal demand, domestic and overseas tin inventory changes, Wa State tin mine resumption progress, US Fed policy trends, and the evolution of the global trade environment. Short-term range trading is recommended, while mid-term strategies await the clarification of the supply-demand imbalance.