Weak supply and demand in fundamentals, short-term fluctuations in tin prices, "waiting for the wind" – macro factors may become the key to breaking the deadlock! [SMM Monthly Outlook]

May 13, 2025 17:46

Source:SMM

[SMM Monthly Outlook: Weak Fundamentals in Both Supply and Demand, Tin Prices to Experience Short-Term Volatility, "Waiting for the Wind" - Macro Factors May Be the Key to Breaking the Deadlock!] As Alphamin announced the phased resumption of production at the Bisie mine and the successful convening of the Myanmar tin mine production resumption meeting, market expectations for a tight future tin ore supply have improved. However, concerns over uncertainties in global economic growth and demand prospects triggered by tariffs have also suppressed tin prices. Coupled with a significant decline in market risk appetite, tin prices, which hit a new high in early April, have since experienced a notable correction. Ultimately, LME tin prices fell by 14.46% in April, while SHFE tin prices dropped by 9.03% in the same month. Following the sharp decline in April, since entering May, except for notable fluctuations in LME tin prices during the first two trading days of the month, both LME tin and SHFE tin have predominantly fluctuated rangebound. As of around 15:37 on May 13, LME tin prices fell by 0.09%, closing at $32,545/mt, with a temporary monthly increase of 3.83% in May; SHFE tin prices rose by 0.37%, closing at 262,070 yuan/mt, with a temporary monthly increase of 0.1% in May.

SMM News on May 13:

As Alphamin announced the phased resumption of production at the Bisie tin mine and the successful convening of the Myanmar tin mine production resumption meeting, market expectations for a tight future supply of tin ore have improved. However, concerns over uncertainties in global economic growth and demand prospects triggered by tariffs have also weighed on tin prices. Coupled with a significant decline in market risk appetite, tin prices, which hit a new high in early April, have since seen a notable correction. Ultimately, LME tin fell 14.46% in April, while SHFE tin dropped 9.03% in the same month. After the sharp decline in April, since entering May, except for notable fluctuations in LME tin during the first two trading days of the month, both LME tin and SHFE tin have mainly fluctuated rangebound. As of around 15:37 on May 13, LME tin was down 0.09%, trading at $32,545/mt, with its monthly line for May temporarily up 3.83%; SHFE tin was up 0.37%, trading at 262,070 yuan/mt, with its monthly line for May temporarily up 0.1%.

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On the spot market

Tin spot prices fell % in April

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In terms of tin spot prices: According to SMM quotes,the average price of SMM Grade 1 tin spoton March 31 was 282,200 yuan/mt, while on April 30, it was 261,200 yuan/mt. Over the course of a month, the average price fell by 21,000 yuan/mt, representing a 7.44% decline in April. Since entering May, tin spot prices have fluctuated, with the average price of SMM Grade 1 tin spot on May 13 being 262,100 yuan/mt, a slight increase of 900 yuan/mt compared to the average price of 261,200 yuan/mt on April 30, representing a 0.34% rise.

Fundamentals

Refined tin production in April declined both MoM and YoY

Production:

According to SMM data based on market-exchanged processing fees, in April 2025, China's refined tin production decreased by 0.52% MoM and fell by 8.13% YoY. The continuous tightening of the tin concentrate and scrap tin supply chains has imposed rigid constraints on capacity, leading to a slight decline in the overall operating rate. Yunnan production area: Pressure on the raw material side is prominent, with Myanmar ore imports remaining below the 10,000 mt physical tonne warning line for several consecutive months. Tin concentrate treatment charges (TCs) have remained at historically low levels, putting pressure on smelter profits and limiting production enthusiasm. Resumption of production: The capacity utilization rate rebounded slightly in April, but due to the impact of the shutdown of the Bisie tin mine in the Democratic Republic of the Congo (accounting for 6% of global supply) and the extended preparation period for the resumption of production in Myanmar, the raw material shortage has intensified, and the operating rate remains below the level of Q4 2024.Jiangxi Production Area: Relying on the scrap tin recycling system, the recycling volume of scrap tin declined after the Lunar New Year. Coupled with a decrease in TCs, the production costs of smelters in the Jiangxi region continued to rise, leading some smelters to gradually cut production, with subsequent difficulties in restoring previous output levels. Inner Mongolia Production Area: Affected by its own mine production, production was hindered in April, resulting in a slight decline in output. Anhui and Emerging Production Areas: Affected by the shortage of scrap and tin concentrates, overall production fell short of expectations, with a slight decrease in operating rates. 》Click to view details

Operating rates of refined tin smelters in Yunnan and Jiangxi remain low

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According to SMM's in-depth market survey data on TCs, as of May 9, the operating rates of refined tin smelters in Yunnan and Jiangxi, two major tin-producing provinces, remained at a low level, with a combined operating rate of 57.16%. Yunnan: The operating rates of refined tin smelters in Yunnan remained low due to a shortage of raw materials, significantly below the levels of Q4 2024. Myanmar's tin ore imports have been below the 5,000 mt warning line for several consecutive months. Additionally, the Bisie tin mine in the DRC has not yet fully resumed production. Alphamin Resources Corp. announced a phased resumption of operations at the Bisie mine, emphasizing the gradual return of employees and the stockpiling of sufficient supplies to ensure the continuity of production resumptions. It is expected that the resumption of production will alleviate the supply tightness originally scheduled for Q2 2025, but a full recovery will take several months. Normalization of Low Operating Rates: The operating rates of smelters in Jiangxi remain low, primarily relying on the scrap tin recycling system. Some enterprises have been forced to cut production due to insufficient scrap. Intensified Cost Pressures: The difficulty in recycling scrap tin has increased, coupled with a decrease in TCs, leading to a continuous rise in production costs for enterprises. Some capacities may permanently exit the market. Suppressed End-Use Demand: High tin ingot prices have led to sluggish restocking intentions in the electronics/home appliance industries, causing blockages in the industry chain transmission and further reducing the circulation of scrap.

SMM Reports Increase in Social Inventory of Tin Ingots in Three Regions

Domestic Social Inventory of Tin Ingots: According to SMM's survey, as of May 9, the total social inventory of tin ingots in three regions surveyed by SMM was 10,193 mt, an increase of 360 mt compared to the inventory data of the previous trading week.

LME Tin Inventory: The LME tin inventory data on March 31 was 3,050 mt, and on April 30 it was 2,755 mt, indicating a decline in LME tin inventory in April. The latest LME tin inventory data on May 13 was 2,790 mt, showing a slight increase compared to April 30.

SMM Outlook

Macro Aspects: Following the release of the joint statement from the China-US Geneva Economic and Trade Talks, market concerns about global trade conflicts have eased, and market risk appetite has rebounded. In the future, attention should be paid to the impact of China's total social financing, new RMB loans, and official PMI data for May, as well as the US's April CPI, weekly initial jobless claims, April core PCE price index, and May PMI data on tin prices.

Fundamentals: In terms of supply: Based on SMM's estimates, it is expected that with the resumption of production by some enterprises that had halted operations for maintenance, refined tin production in May may increase QoQ. Additionally, since the restart of the Bisie tin mine, the first batch of fully documented and approved tin concentrates available for export was dispatched by truck on May 9, 2025. According to SMM, the transportation cycle for tin concentrates from the Democratic Republic of the Congo to Asia typically takes 4-6 weeks. The first batch dispatched on May 9 is expected to enter the smelting process in June. In the short term, the spot tin market will still face inventory tightness pressures. However, as the phased resumption of production at the Bisie tin mine progresses, it may curb the speculative sentiment that had been driven by geopolitical risks, thereby suppressing SHFE tin prices. On the demand side: No significant improvement has been observed so far. The spot market remains sluggish due to high tin prices. It is expected that until new demand drivers emerge, the weak demand situation will continue to exert certain pressure on tin prices.

In summary, the favourable macro environment may support tin prices, while the weak supply and demand on the fundamentals side, along with the easing of market expectations for tight supply, have weakened the fundamental support for tin prices. Before significant improvements occur in the tin market's fundamentals, short-term attention should be paid to the guidance of macro trends on tin prices. It is expected that until significant favourable or unfavourable macro factors emerge, tin prices may continue to fluctuate rangebound.

Weak supply and demand in fundamentals, short-term fluctuations in tin prices, "waiting for the wind" – macro factors may become the key to breaking the deadlock! [SMM Monthly Outlook]

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