Overseas Inventories Significantly Increased, SHFE Tin Sharply Declined [SHFE Market Closing Review on April 9]

Overnight, LME three-month tin plunged by 3.91%, dragging SHFE tin down by more than 3% at one point. During today's day session, SHFE tin continued to decline, with the most-traded contract closing down 5.55% at 254,100 yuan/mt. Recent escalation in global trade conflicts has led to a sell-off in commodities amid risk-off sentiment, resulting in a catch-up decline in tin prices, which had previously shown relative strength.

On Tuesday, LME tin inventory surged significantly, increasing from 2,990 mt to 3,435 mt, a single-day rise of 15%. Nearly 500 mt were delivered to a Malaysian warehouse, alleviating concerns over tin supply. The premium of LME spot tin over three-month tin was reported at $50/mt, down from $234/mt on Monday. Domestic social inventory continued to climb, with traders showing active willingness to sell. However, overall downstream buying sentiment remained limited. Feedback indicated that although tin prices have fallen sharply recently, downstream inquiries and purchase willingness have warmed up, but some downstream players remain cautious and are maintaining a wait-and-see approach, with transactions mainly focused on just-in-time procurement.

The tight supply situation for tin ore has not significantly changed, and recent disruptions have also affected refined tin smelting. According to a statement from Malaysia Smelting Corporation (MSC) on April 3, 2025, the natural gas supply to its smelter was interrupted due to a pipeline explosion in Putra Heights, Selangor, Malaysia, on April 1, 2025, leading to a halt in tin supply. The resumption of supply is pending further notice. MSC produced 16,300 mt of refined tin in 2024, making it the world's fifth-largest refined tin producer. MSC stated that this incident may cause delays in the delivery of some tin metal.

Regarding the market outlook, Guangzhou Futures commented that on the macro front, the mutual imposition of tariffs between China and the US has further escalated the trade war, leading the short-term market to favor risk-off and recession trades, which is bearish for the overall non-ferrous metals sector. On the industry front, if overseas mines continue to halt production, it could shift the fundamentals of tin ore and refined tin from weak balance to tightness. However, with macro factors currently dominating the market, tin prices are expected to follow the volatile movements of surrounding metals.