[SMM Analysis] Refined Tin Production Continues to Decline in January; Most Smelters Are Expected to Suspend Operations for Maintenance During Chinese New Year

SMM, January 23:

According to SMM's market-based data, China's refined tin production in January 2024 decreased by 4.62% MoM. However, on a YoY basis, it still achieved a slight increase of 0.65%. Affected by the tightening supply of tin ore and scrap, the overall output of domestic tin ingots showed a downward trend in January.

In Yunnan, the continuous low volume of tin ore imports from Myanmar, coupled with a decline in tin ore imports from other countries, has posed severe challenges to raw material supply for local smelters. Under these circumstances, most smelters chose to maintain the status quo or moderately reduce production. If Myanmar's tin ore production ban remains unchanged, we expect smelters in Yunnan to continue experiencing production declines. Additionally, the recent continuous drop in tin concentrate TC, which has fallen below the cost line for some smelters, has forced a few enterprises to suspend production for maintenance during the Chinese New Year holiday.

Meanwhile, in Jiangxi, smelters also generally saw production declines in January. Coupled with the pre-holiday shutdowns of most downstream and end-user enterprises, scrap supply experienced seasonal shortages. Most smelters in Jiangxi have also entered the Chinese New Year holiday and are expected to resume production around the Lantern Festival. In Inner Mongolia, smelting activities remained relatively stable. However, in Anhui and other regions, due to increased difficulty in obtaining raw materials and the impact of the holiday, smelters' production has been affected, posing significant challenges to maintaining future production levels.

Considering these multiple factors, we predict that national tin ingot production may further decline in February. Given the significant uncertainties surrounding tin ore imports from Wa State in Myanmar and the increasingly severe raw material supply issues faced by smelters, we recommend that all market participants remain highly vigilant and closely monitor the latest developments in the raw material market to respond promptly to potential market fluctuations.