[SMM Analysis] Operating rates of smelters in Yunnan and Jiangxi remain low, and are expected to continue to fluctuate at lows

[SMM Analysis: Operating Rates of Smelters in Yunnan and Jiangxi Remain Low, Expected to Fluctuate at Lows in the Near Future]: According to processing data from SMM's in-depth market survey, the weekly operating rates of refined tin smelters in Yunnan and Jiangxi have been running at persistently low levels recently. As of this week, the combined operating rate of the two provinces stood at only 46.84%. Sharp Decline in Tin Ore Imports to Yunnan: The progress of production resumptions at the Wa region's mines in Myanmar has stalled, coupled with transportation difficulties during the rainy season, leading to a continuous decline in tin ore imports from the Wa region. Meanwhile, due to Thailand's transportation ban, the southern part of Myanmar has seen a reduction of 500-1,000 mt (metal content) in tin ore supply per month. Pressure on Treatment Charges (TCs): The TCs for 40% grade tin concentrates in Yunnan have fallen to historical lows, approaching the cost line of smelters, severely squeezing profit margins and forcing some enterprises to cut production or undergo maintenance. Shortage of Recycled Tin Raw Materials in Jiangxi: Jiangxi smelters primarily rely on scrap tin recycling, but the recycling volume of scrap materials after the Chinese New Year has been less than 70% of the annual average. The supply of electronic scrap has declined by 30% MoM, compounded by policy uncertainties (such as adjustments to renewable resource policies), exacerbating the raw material shortage. Rising Costs: The rising cost of scrap sorting, coupled with the decline in TCs for tin concentrates, has eroded the profits of recycled tin smelting, potentially leading to the permanent exit of some capacities. Blockage in Transmission to End-Use Industries: The electronics and home appliance industries have slowed down their production pace due to cost pressures, reducing the circulation of scrap materials and forming a negative feedback loop. The raw material shortage is unlikely to be alleviated in the short term, coupled with the off-season in consumption. It is expected that the operating rates of smelters in Yunnan and Jiangxi will continue to fluctuate at lows or even decline further.