During the night session, SHFE tin prices experienced a slight rally before fluctuating and pulling back. Downstream enterprises remain in a wait-and-see stance. [SMM Tin Morning News]

SMM Tin Morning Brief on October 17, 2025:

Futures: The most-traded SHFE tin contract (SN2511) edged up during the night session before fluctuating and pulling back, closing at 281,520 yuan/mt, up 0.53% from the previous trading day.

Macro: (1) Jingcheng Electromechanical stated in its investor relations activity record that on September 26, the company's first 12-inch silicon carbide substrate processing pilot line officially commenced operations at its subsidiary Zhejiang Jingrui SuperSiC. This marks the subsidiary's achievement of fully independent R&D across the entire equipment chain from crystal growth and processing to detection, achieving 100% localisation. It signifies Jingcheng's global SiC substrate technology transition from keeping pace to leading, entering a new phase of efficient intelligent manufacturing. The company is expected to accelerate the mass production process of the production line, providing customers with high-quality, low-cost large-size silicon carbide substrates, and collaborating with industry chain partners to jointly boost the vigorous development of China's third-generation semiconductor industry. (2) Xinlian Integrated announced that it plans to increase its capital contribution by 1.8 billion yuan to its controlling subsidiary, Xinlian Pioneer Integrated Circuit Manufacturing (Shaoxing) Co., Ltd. After the capital increase, Xinlian Pioneer's registered capital will be no less than 13.292 billion yuan, and Xinlian Integrated's stake in Xinlian Pioneer will be no less than 50.85%. The funds for this capital increase originate from new-type policy financial instruments, aimed at ensuring the continued implementation of the "Phase III 12-inch Integrated Circuit Digital-Analog Mixed-Signal Chip Manufacturing Project." This project has an estimated total investment of 22.2 billion yuan and is expected to achieve a capacity scale of 100,000 wafers per month, with products widely used in new energy, automotive, industrial control, consumer electronics, and other fields. This capital increase is not expected to adversely affect the company's normal production and operations and aligns with its overall strategic plan. (3) TSMC's earnings call released a strong outlook, with Chairman C.C. Wei stating that demand for generative AI is stronger than it was three months ago. Currently, both front-end and back-end capacity for AI chips are extremely tight, and the company is fully expanding supply. AI-related capacity is expected to remain difficult to fully meet demand before 2026. Regarding capital expenditure, TSMC will continue high-level investment over the next two years, but revenue growth is expected to outpace Capex growth, continuing the trend of improving capital efficiency seen in recent years.

Fundamentals: (1) Supply-side disruptions: Tin ore supply is tightening overall in major producing regions like Yunnan. Some smelters maintained production halts for maintenance in October (Bullish ★). (2) Demand side: Orders have decreased significantly due to weak demand in the consumer electronics and home appliance markets. Downstream procurement remains cautious, and high prices are significantly suppressing actual consumption. Limited boost from emerging sectors: Although increased AI computing power and growth in PV installations are driving some tin consumption, their current contribution scale remains small and insufficient to offset the decline in consumption from traditional sectors.

Spot Market: Spot market trading remained sluggish, with some downstream enterprises maintaining a wait-and-see stance toward current prices and continuing to make just-in-time procurement in small quantities. Most traders reported transactions of only around 10 mt, while a small number of trading firms recorded sales of more than one truckload.

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