[Explanation of Recent SMM #1 Tin Spot Quotations and Market Expectations]

In response to the recent discrepancy between spot quotations and the expectations of some enterprises, we provide the following explanation by combining market dynamics with the essence of the methodology:

I. Core Methodology Remains Stable and Rigorous

The price assessment methodology for SMM #1 tin is rigorous, transparent, and consistent. According to the SMM Price Assessment Methodology General Rules and the definition of the SMM #1 tin spot price (excerpts from the SMM #1 tin price assessment methodology are provided below): The SMM #1 tin (1# tin, hereinafter referred to as tin ingot) spot price is an indicative price formed and published by SMM according to this methodology, which can be used by both trading parties as a reference for settling spot tin ingot trades. This price reflects the indicative range of the most likely transaction prices for ex-works spot trades at the time of SMM's tin ingot spot price publication on each full working day. This price is primarily based on the spot transaction price conditions in Shanghai and other regions on the day, minus relevant trade costs such as transportation expenses and capital carrying costs. Other regions may adjust the actual settlement price during transactions based on the correlation between regional markets relative to this price. The SMM #1 tin spot quotation is always based on actual transaction data. Its essence is the immediate supply-demand balance point in the current spot market, focusing more on the industrial reality of the "present."

The original text of the SMM #1 tin price assessment methodology can be found at the following link (https://static.smm.cn/comp.smm.cn/2.0.16/static/comp.smm.cn/pdf/v3/cn/1%23%E9%94%A1%E4%BB%B7%E6%A0%BC%E6%96%B9%E6%B3%95%E8%AE%AE.pdf)

II. The Core Contradiction in the Current Spot Market: Behavioral Divergence in a High-Volatility Environment

In the current market environment, corporate procurement and sales strategies often adjust dynamically with price fluctuations. When prices are in a relatively stable range, i.e., when the market operates normally, smelters typically prioritize stable production as their core objective, engage in mild hedging in the futures market to manage risks, and maintain inventory at a reasonable, neutral level. Downstream solder enterprises mostly adopt a continuous stockpiling model, formulating regular procurement plans based on orders and demand forecasts, maintaining safety stock, and their pricing operations are relatively flexible.

However, when prices experience significant increases or decreases, the trading behavior of some enterprises undergoes notable changes: pricing timing, transaction price levels, and shipment sentiment may all adjust. Specifically, procurement strategies shift from a continuous stockpiling model to a more cautious "opportunistic procurement" approach, with an overall slowdown in stockpiling pace. Amid high funding costs and increased order uncertainty, some enterprises tend to operate with low inventory and are exceptionally sensitive to spot prices; others may maintain their original pace.

Nevertheless, SMM's quotations are always based on actual transactions. We not only continuously collect transaction data from clients whose pricing habits remain unchanged but also simultaneously track the adjusted pricing timing and transaction levels resulting from strategic shifts, ensuring the price comprehensively and authentically reflects the overall transaction level of the market on that day.

III. Summary

The SMM #1 tin price assessment methodology adheres to the principles of openness, transparency, and consistency, with a clearly defined formation process featuring specific norms and standards. The recent discrepancy between market feedback on quotations and expectations primarily stems from phased adjustments made by some physical enterprises in their procurement pace, inventory structure, and pricing strategies against the backdrop of intensified futures market volatility. SMM consistently closely monitors market dynamics and fully incorporates the adjusted pricing windows and actual transaction situations of enterprises into its price collection, continuously optimizing data representativeness. In the future, SMM will continue to uphold the principles of independence, objectivity, and fairness, providing high-quality price benchmark services for all parties in the industry chain, and jointly promoting market stability and efficiency enhancement. Feedback Hotline: Wang Cong 021-51666838; Feng Disheng 021-51666714; Chen Peng 021-20707878

SMM Information & Technology Co., Ltd.

Jan 2026