Ministry of Commerce: China Urges U.S. to Halt 232 Tariff Measures as Soon as Possible, Spot Market Sluggish Due to High Prices [SMM Tin Morning News]

SMM Tin Morning News on May 16, 2025:

Futures Market: The most-traded SHFE tin contract (SN2506) opened higher during the night session and then fluctuated at highs, closing at 265,850 yuan/mt, up 0.18% from the previous trading day. Total open interest reached 28,900 lots.

Macro: (1) Li Qiang: Strengthening the domestic circulation should be a strategic move to drive steady and sustained economic growth. (Bullish ★) (2) Ministry of Commerce: China urges the US to cease the Section 232 tariff measures as soon as possible and resolve the concerns of all parties through equal dialogue. (Bullish ★) (3) Ministry of Commerce responds to the US's abuse of export control measures to restrict Huawei's Ascend chips: China will take resolute measures to safeguard the legitimate rights and interests of Chinese enterprises. (Bullish ★) (4) Tariffs - Japan seeks to hold the third round of US-Japan trade negotiations next week. The US is considering revising the US-Japan trade agreement. The EU and the US will accelerate the trade negotiation process, with the EU hoping for greater tariff reductions than the UK. (Neutral) (5) Fed Chairman Powell: The Fed is adjusting its overall policy framework. Zero interest rates are no longer a baseline scenario. There is a need to reconsider the language on underemployment and average inflation. The April PCE is expected to fall to 2.2%. (Bullish ★)

Fundamentals: (1) Supply-side disruptions: Alphamin Resources Corp.'s Bisie tin mine produced 1,290 mt of metal tin from April 15 to May 11, 2025, achieving the expected processing recovery rate. Tin production commenced by processing raw ore stockpiles from the mine, initially from the Mpama North plant, followed by the restart of the Mpama South plant on April 19, 2025. Underground ore blasting and transportation began in the last week of April 2025, while the mine development rate also increased. The first batch of fully documented and approved tin concentrates for export was shipped by truck on May 9, 2025, since the restart of the mine. (Bullish ★) (2) Demand side: After the Labour Day holiday, some downstream processing enterprises gradually resumed operations, and the demand for restocking at lower prices was somewhat released, but high-price transactions remained sluggish. (Bearish ★)

Spot Market: The transaction price of tin ingots fluctuated around 265,000 yuan/mt. Spot transactions were sluggish. Downstream solder, electronics, and home appliance enterprises, constrained by high prices, only maintained just-in-time procurement, with no significant increase in orders. Emerging demands such as PV welding strips and semiconductor packaging remained resilient, but it was difficult to offset the weakness in traditional sectors.