LME tin and SHFE tin prices fall for two consecutive months on monthly chart [SMM Monthly Outlook]

SMM May 30 Report:

Unlike the significant decline in tin prices in April, tin prices fluctuated rangebound in May. As May drew to a close, despite the ongoing tight supply of tin ore in the short term, market expectations for supply recovery increased due to the gradual resumption of production at tin mines in Myanmar's Wa region and the Democratic Republic of the Congo (DRC). Additionally, uncertainties surrounding US tariff policies cooled market risk appetite, leading to a notable correction in tin prices. As of around 18:10 on May 30, LME tin fell by 1.56%, closing at $30,750/mt, with its monthly line for May temporarily down 1.91%. SHFE tin dropped by 2.87%, closing at 250,300 yuan/mt, with its monthly line for May down 4.39%.

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On the spot market

Tin spot prices fell by 3.71% in May

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In terms of tin spot prices: According to SMM quotes,SMM 1# tinThe average spot price on May 30 was 251,500 yuan/mt, down 9,700 yuan/mt from the average price of 261,200 yuan/mt on April 30, representing a decline of 3.71%.

Fundamentals

Refined tin production in May fell by 2.37% MoM

►Production:

According to SMM's data based on market communication and processing, in May 2025, China's refined tin production fell by 2.37% MoM. On a YoY basis, production decreased by 11.24%. The continuous tightening of the tin concentrate and scrap tin supply chains imposed rigid constraints on capacity, leading to a slight decline in the overall operating rate. By region: Yunnan region: Intertwined raw material shortages and cost pressures; Jiangxi region: The scrap recycling system is under pressure, with an increased risk of capacity exits;Inner Mongolia, Anhui, and other regions: In Inner Mongolia, production slightly rebounded in May due to production issues at captive mines, but it has not yet returned to previous levels. In Anhui and other producing regions, operating rates continued to fall short of expectations due to shortages of scrap and tin concentrates.》Click to view details

►Operating rate:

According to SMM's market survey and processing data, as of Friday this week, the operating rates of refined tin smelters in Yunnan and Jiangxi, the two major tin-producing provinces, remained low, with a combined rate of 54.58%. Among them, the operating rate of smelters in Yunnan slightly declined from the previous week, with a nearly 10 percentage point drop from the beginning of the year. Some smelters in core producing areas such as Gejiu have entered seasonal maintenance or production cuts due to raw material shortages and cost pressures. Currently, the raw material inventory of enterprises is generally below 30 days. Some enterprises are facing inventory backlogs due to high-priced stockpiling in the early stage (with a psychological price level of approximately 270,000 yuan/mt), coupled with weak purchase willingness downstream, resulting in significant shipping pressure. Meanwhile, the treatment charges (TCs) for tin concentrates with a 40% grade have remained at historically low levels, approaching the cost line of smelters, severely squeezing profit margins. During the same period, the operating rate of smelters in Jiangxi was only 41.02%, consistently lower than that in Yunnan, and had decreased by approximately 15 percentage points compared to the beginning of the year. Some enterprises were forced to implement long-term production cuts due to insufficient scrap supply, with some production capacities facing the risk of permanent exit.

►Inventory:

Social inventory of tin ingots in three locations tracked by SMM has declined.

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Domestic social inventory of tin ingots: This week, SHFE tin prices showed a pattern of initial stability followed by a decline, with a significant correction during the week. The trigger: Market rumors suggested that the first batch of tin ore from Myanmar's Wa region had obtained export permits (later verified that most miners had not paid fees, and production resumptions fell short of expectations). Spot market transactions for tin ingots: Price declines stimulated restocking. Trading was sluggish at the beginning of the week, with smelters maintaining firm quotes but actual transactions being scarce. Downstream caution: End-users made just-in-time procurement only, with traders reporting "few purchases at current prices, with a focus on backward pricing." Restocking was released after the price decline (May 29). Low prices stimulated demand: After tin prices fell below 260,000 yuan/mt, downstream restocking intentions increased at lower prices: Some end-user enterprises made just-in-time procurement, with traders achieving over 100 mt in a single day (compared to a previous daily average of 20-30 mt).

LME tin inventory: LME tin inventory data on May 30 was 2,680 mt, compared to 2,755 mt on April 30. LME tin inventory showed a slight decline in May, with a decrease of 2.72%.

SMM Outlook

Macro: In the future, attention should be paid to the boosting effect on tin prices from the release of several major financial policies by China at the Lujiazui Forum, as well as whether other stimulus policies will be introduced to boost future demand in the tin market. Additionally, attention should be paid to China-US PMI, CPI, PPI, domestic imports and exports, and social financing, as well as US non-farm payrolls data and the guidance of market expectations from the US Fed's June interest rate-setting meeting. Furthermore, it is worth noting that the uncertainty surrounding US tariffs has repeatedly disrupted the market performance of metals such as tin. In the future, attention should also be paid to tariff negotiations between Europe and the US, as well as the US's imposition of tariffs on solar energy from ASEAN.

Fundamentals: In terms of supply: Based on SMM calculations, affected by planned shutdowns for maintenance at some smelters in Yunnan and Jiangxi, refined tin production is expected to continue to decline MoM in June. Myanmar's Wa region officially resumed production at the end of April 2025, but actual capacity ramp-up has been slow. Affected by earthquakes and infrastructure damage, shipments had only reached 30% of pre-shutdown levels by late May. The approval of new mining licenses has been strict, with actual approved production capacities reduced. Coupled with export tax system reforms (changing from cash tax to in-kind tax), it is expected that China's tin ore imports from Myanmar in 2025 will significantly decline compared to the average from 2019-2022. Although the Bisie mine announced phased production resumptions, the repair of the power system will take more than three months. Despite Indonesia's refined tin exports increasing by over 50% YoY in March and April, license approvals are still affected by corruption investigations, and the government's strengthening of local smelting policies may compress medium and long-term export potential. In summary, the supply recovery in major tin mining regions in 2025 has been significantly lower than market expectations, providing support to tin prices from the supply side. On the demand side, affected by the traditional seasonal consumption off-season in downstream industries, the downstream demand for tin is weak, which will put pressure on tin prices.

In summary, uncertainties in overseas macroeconomic conditions may repeatedly disrupt tin prices. Fundamentals side, in terms of supply, traditional major producing regions are generally facing a systematic decline in tin grades, and the short-term resumption of production at tin mines in Myanmar's Wa region and the DRC is unlikely to fill the capacity gap, which will continue to support tin prices. However, the off-season effect on the demand side will suppress the market performance of tin prices, and destocking of tin inventory both domestically and internationally will also provide support for tin prices in terms of destocking. Going forward, attention should be paid to the pace of overseas tin mine production resumptions and changes in their imports into China, as well as whether the decline in tin prices can lead to a sustained increase in procurement and restocking demand.

Recommended readings:

》[SMM Analysis] Analysis and Trend Outlook of China's Refined Tin Industry in May 2025

》[SMM Analysis] Operating Rates of Smelters in Yunnan and Jiangxi Continue to Decline, with Raw Material Shortages Persisting

》Social Inventory of Tin Ingots by Region as of May 30, 2025 [SMM Data]