Downstream Consumption Remains Weak, SHFE Tin Pulls Back [March 24 SHFE Market Closing Commentary]

Myanmar tin mine resumption time remains unclear, DRC situation is tense, with significant uncertainty over when tin ore supply can be restored. The tight raw material supply situation has not noticeably improved. However, the previous rise in tin prices suppressed demand, leading to weaker downstream purchases. Domestic social inventory has been building up continuously, and tin prices have pulled back from highs. Today, SHFE tin first declined then rebounded, with the most-traded contract closing at 276,620 yuan/mt, down 0.81%. The resumption time for Myanmar's tin mines is undetermined, and insufficient tin ore imports have led to a tight domestic tin ore supply. Tin concentrate processing fees (TC) have continued to decline. Currently, domestic tin ingot production remains relatively stable, and smelters are operating steadily. However, as the tin ore supply continues to tighten, pressure on the smelting end gradually becomes evident, and processing fees are under continuous pressure, approaching the cost lines of some enterprises, further limiting the room for increasing operating rates. The current market focus is on the shutdown duration of the Bisie tin mine. Rebel forces have captured Walikale, a key mining town in North Kivu Province in the east, which is 60 kilometers northwest of the Bisie tin mine. The local situation is becoming increasingly tense, potentially affecting the resumption time of tin ore production. Recent domestic consumption performance has been poor, with no significant improvement in the end-user market. Downstream tin processing enterprises have not seen a noticeable increase in operations, and high tin prices have suppressed consumption. Feedback from downstream indicates that since March, some end-users have been cautious in purchasing, and recent price volatility has dampened the willingness to stockpile. Overall, orders have mainly been just-in-time procurement, and future consumption strength will depend on downstream order intake and subsequent production conditions. Domestic social inventory of tin ingots has been building up, mostly due to traders transferring to delivery warehouses. Jinrui Futures commented on the outlook, stating that the tight tin ore supply continues to escalate, and domestic raw materials may remain tight until Myanmar resumes production. Processing fees are expected to maintain a downward trend, and smelting production pressure is likely to increase. On the demand side, recent price fluctuations have significantly weakened downstream purchases. In the short term, considering the tight raw material supply and the strong price suppressing downstream activity, tin prices are expected to remain in a high-level stalemate.