[SMM Analysis] Shanghai Tin has been going up for days to recover 120000 gate supply side tightening to support the trend of tin prices.

SMM4 1: since March 23, Shanghai tin historic decline of more than 6%, recently entered a sustained recovery trend, not only recovered all the lost ground below the EMA, but also successfully recovered the 120000 level, as of April 1, the Shanghai-tin main contract 2006 closed at 121290 yuan / ton, up nearly 1.2% on the same day, and once rose to 122780 yuan / ton, the highest level in nearly half a month on March 18.

In the news, AfriTin, an African tin mining company, has suspended some activities at the Uis tin mine in Namibia after Namibia ordered mining companies to suspend production for three weeks until April 16. However, because of the important economic position of the mining industry in the country, related activities can be carried out to a minimum, such as some key maintenance work. As a result, open-pit operations will be suspended in the Uis mine, but during the blockade, African tin mines will continue to use existing stocks to provide raw materials for processing plants. It is reported that the company's existing inventory can maintain production for at least two months.

In addition, on March 18, PT Timah, the world's second largest tin producer and Indonesian tin miner, said it would temporarily cut production and delay exports because of the impact of the new crown virus outbreak on tin demand. "under the current circumstances, many companies are shutting down production due to the coronavirus outbreak, which has reduced demand and prices will continue to be revised," RizaPahlevi, the company's chief executive, said in a statement late Tuesday. " It said it was delaying some exports and cutting monthly production by 20-30 per cent while assessing global demand. According to SMM, Indonesia's Tianma Company will produce nearly 80, 000 tons in 2019. If the production reduction plan is implemented this year, the average monthly production reduction will not exceed 2000 tons. At present, the duration of the production reduction measures is not clear, but the overall support for the trend of global tin prices is limited.

In terms of fundamentals, the supply of imported tin ore is still relatively tight, the continuity of short-term supply in the future has not been guaranteed, some refineries are expected to reduce production, and it is expected that the supply of short-term refined tin may be relatively tight. Downstream demand, affected by the epidemic, some downstream enterprise orders were damaged, the early Shanghai tin plate fell when some have been bargain stock, so the recent tin price upward, downstream enterprises buy significantly weaker. The overall weak pattern of supply and demand in tin city has not changed.

SMM believes that the recent rally in the external market is mainly due to short-term positive macro policies at home and abroad, market panic and bearish sentiment have declined compared with the previous period, and some of the short forces of tin trading in Shanghai have left the market to push up the market price. And Shanghai tin spot prices are relatively strong overall to maintain a relatively high rising water state, to a certain extent, constitute a certain support for the trend of Shanghai tin market. Today, Shanghai tin early trading 120730 yuan / ton after the opening of short positions affected by the impact of short positions rose to a daily high of 122780 yuan / ton, and then the bulls left Shanghai tin pressure fell back. Within days, Shanghai tin 2006 contract line to the early jump gap rise and fall point of 123000 yuan / ton, it is expected that the short-term Shanghai tin support is located in the 5-day moving average of 118000-119000 yuan / ton, the upper resistance is concerned about whether Shanghai tin can effectively break the 123000 yuan / ton near the threshold.

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