Supply Themes Maximally Overlapped, Demand Emphasized [Institutional Commentary]

Upstream supply: The local damage caused by the earthquake in Wa State was limited. As the second special region of Myanmar, Wa State operates with high efficiency. On March 28, the Wa State government issued a letter of condolence, calling on all parties to set aside differences and take active action in emergency relief and post-disaster reconstruction. Wa State announced a donation of 2 billion kyats (approximately 6.8 million yuan) to the affected people. On the 30th, the United Wa State Army also rushed to the disaster area. Wa State originally planned to resume tin ore mining and transportation in Q2, and a symposium on the resumption of production at the Manxiang mining area was scheduled for April 1. While earthquake rescue is the priority, there is a probability of delays in the resumption of production. However, in the face of disaster, unity is crucial, and the necessity and urgency of post-disaster resumption are also high. Among the two main tin concentrate transit ports, the Ruili port has basically resumed operations, while the Menglian port is relatively far and the earthquake impact is limited. Attention is focused on the Wa State government's attitude towards earthquake relief and resumption of production. In the DRC, on the 28th, M23 signed an agreement with the Southern African Development Community delegation in Goma, North Kivu Province, agreeing to assist in the withdrawal of the SADC special mission troops in the DRC. At the same time, the leader of the movement arrived in Doha, the capital of Qatar, increasing the likelihood of tripartite talks between the DRC, M23, and Rwanda. Domestic tin raw material supply remains tight, with the SMM smelter's weekly operating rate declining, defined as a resonance result of "rigid contraction of raw material supply" and "insufficient demand elasticity."

Downstream consumption: Domestic mid- and downstream acceptance of high tin prices is generally moderate, with SMM inventory increasing by 934 mt to 11,482 mt. Overseas tin inventory outflow, LME tin inventory decreased by 710 mt to 3,050 mt, and the spot premium for 0-3 months widened to $195. Subsequent LME tin open interest remained relatively stable, with very limited trading volume of high-level call options.

Market outlook: Supply themes are superimposed with exceeding expectations, and short-term entry funds are excited. Last week, mid- and downstream purchases at 275,000 were emphasized. After the Myanmar earthquake, there was temporary support around 280,000. Subjectively, it is difficult for SHFE tin to effectively break through 290,000, requiring strong leadership from LME tin. For now, tin prices are oscillating at a high level between 280,000 and 290,000.