Tin prices have risen for three consecutive months, with expectations of resumption in Wa State and domestic macro warmth coexisting. How will the tin market move in the future? [SMM Analysis]

Although the expectation of resumption in Wa State at the end of February once weighed on tin prices, domestic macro tailwinds, coupled with the anticipation of tight supply in the mining sector and expected growth in downstream demand from industries like semiconductors, drove tin prices to continue their upward trend in February, following the gains of the previous two months. LME tin rose 4.01% in February, while SHFE tin closed the month with a 3.19% increase. Entering March, despite the erratic US tariff policies and the reinforced expectation of tin mine resumption in Myanmar's Wa State disturbing tin prices, the support from the Two Sessions, the release of downstream restocking demand at low prices, and the weakening US dollar index boosted metal prices, leading to a stabilization and rebound in tin prices. As of 16:09 on March 10, LME tin rose 0.2% to $32,585/mt, with a temporary monthly increase of 4.07% in March; SHFE tin rose 0.34% to 262,810 yuan/mt, with a temporary monthly increase of 2.99% in March. Spot side, the price center of tin spot continued to rise, with a 2.81% increase in February. According to SMM quotations, the average price of SMM1# tin spot on January 27 was 248,800 yuan/mt, and on February 28, it was 255,800 yuan/mt, a monthly increase of 7,000 yuan/mt, with a 2.81% rise in February. Since March, tin spot prices have mostly risen, with the average price of SMM1# tin spot on March 10 at 262,000 yuan/mt, down 0.19% from the previous trading day. Fundamentals side, refined tin production in February fell MoM, while tin production in March is expected to rise MoM. According to SMM data based on market exchange processing, China's refined tin production in February 2025 fell 9.3% MoM, but achieved a significant 10.02% increase YoY. Affected by the gradual tightening of tin ore and scrap supply and the Chinese New Year holiday, domestic tin ingot output continued to decline in February. The data reflects three pressures and structural opportunities faced by the industry: the continuous tightening of the tin concentrate supply chain, the cyclical adjustment of production due to the traditional Chinese New Year holiday, and the industry's capacity resilience under raw material constraints. (1) Yunnan production area: As the core region for tin smelting in China, Yunnan's capacity utilization rate declined in February, primarily due to raw material pressure, with Myanmar ore imports remaining below the 30,000 mt warning line for six consecutive months. (2) Jiangxi production area: Mainly affected by the characteristics of the raw material structure, with the seasonal stagnation of the winter scrap recycling system expanding the raw material gap. (3) Other regions: Inner Mongolia maintained stable operations, benefiting from the unique advantage of captive mine guarantees, while Anhui and surrounding emerging production areas saw a sharp 28 percentage point drop in capacity utilization due to delayed imported ore arrivals and rising scrap sorting costs. According to SMM's in-depth market survey data, as of March 7, the operating rates of refined tin smelters in Yunnan and Jiangxi continued to rise. Yunnan: Capacity remained high, but raw material bottlenecks became prominent, with the weekly operating rate slightly increasing WoW. Jiangxi: The recycled tin system slowly recovered, with the operating rate increasing nearly 20 percentage points from the Chinese New Year low, but still 10 percentage points lower than the Q4 2024 average. According to SMM surveys, as of March 7, the total social inventory of tin ingots in three regions was 8,399 mt, a destocking of 754 mt WoW. SHFE tin inventory continued to rise, with weekly inventory reaching 7,421 mt as of March 7. LME tin inventory was 4,440 mt on January 27, 3,725 mt on February 28, and 3,715 mt on March 10, a decrease of 10 mt from February 28. Macro side, domestically, NDRC Director Zheng Shanjie stated at the economic-themed press conference of the third session of the 14th National People's Congress that the action plan to boost consumption will be released and implemented soon. Internationally, a series of poor US economic data has raised concerns about a slowdown in US economic growth, with the US dollar index falling below 104. Fed Chairman Powell stated last Friday that the Trump administration's policies have increased economic uncertainty, but there is no rush to adjust monetary policy. Fundamentals side, supply side: Given the significant uncertainty in tin ore imports from Myanmar's Wa State and the increasingly severe raw material supply issues for smelters, refined tin production in March is expected to increase by about 15% MoM. Demand side: With tin prices currently high, many companies have postponed large-scale restocking and stockpiling, mainly making just-in-time procurement. In summary, on the macro front, domestic macro expectations are warm, while overseas macro uncertainty increases. With US tariff policies frequently disturbing tin prices, attention should be paid to the implementation of tariffs related to tin consumption terminals. The weak US dollar trend boosts metal prices like tin, but poor US economic data limits the rise in metal prices. Additionally, beware of the technical correction of the US dollar index after a continuous decline suppressing tin prices. On the fundamentals side, tin concentrate TCs continue to be under pressure, and the tight supply pattern of tin ore has not changed, providing support for tin prices from the supply side. After the Wa State Industrial and Mineral Resources Administration released the resumption process document, market concerns that the increase in tin ore supply in H2 will reverse the tight balance pattern, thus suppressing tin prices, although the actual resumption requires 2-3 months of preparation, and the resumption time remains uncertain, awaiting the clarification of Wa State's resumption policy and the pace of capacity release. On the demand side, with tin prices currently high, market sentiment is cautious, and future attention should be paid to the impact of the traditional consumption peak season on tin consumption. It is expected that the tin market will fluctuate upward in the short term driven by domestic macro tailwinds, while the expectation of Wa State's resumption in the medium term may lead to bearish market sentiment.