Fundamentals Stable, Tin Prices Seeking New Equilibrium [[Institution's Comment]]

[Futures Market Review] The most-traded SHFE tin futures contract rose slightly mid-week, closing at 262,000 yuan per mt. SHFE inventory decreased slightly to 9,249 mt, while LME inventory also decreased slightly to 2,425 mt. In terms of advanced data, tin imports remained unprofitable, and the 40% tin concentrate TCs remained stable.

[Industry Performance] The latest document, "Procedures for Obtaining Mining, Beneficiation Plant, and Prospecting Permits in the Manxiang Mining Area," clarified the fee standards for mine tunnels and beneficiation plants, which were significantly higher than those mentioned in the "Wa Jing Zi 2023-08" document issued in December 2023. Industry insiders analyzed that this price adjustment would have a limited impact on high-altitude mine tunnels but would increase cost pressure on low-altitude mine tunnels and small-to-medium-sized beneficiation plants. Some financially weak beneficiation plants might face difficulties in resuming operations. In contrast, large enterprises with strong financial resources would have a greater advantage.

[Core Logic] With macro stability, tin prices are gradually returning to fundamental factors. The supply side remains basically stable. Although the Wa State has issued relevant documents to actively promote the resumption of tin mine production, it will be extremely difficult to complete the entire resumption process within the next 1-2 weeks. On the demand side, due to expectations of easing Sino-US tariff policies, the Philadelphia Semiconductor Index has slightly warmed up. The semiconductor sector is still in the tail end of the prosperity cycle and has not yet shown a significant pullback, providing some support for prices.

[Nanhua's View] Seeking a new equilibrium, with a weekly trading range of 252,000-268,000 yuan per mt.

(Source: Nanhua Futures)