Price trend

On the evening of the 14th, the Shanghai Tin Exchange continued to lead the gains, rising 6.93% to the close. London tin futures led the external market up with a 9.78% gain in the overnight trading.

Analysis review

On April 15, the Central economic planning Committee of the Wa State of Myanmar issued the Notice on Suspension of All Mineral Resources Exploitation, which pointed out that in order to protect the Wa mineral resources, the mining and excavation of all mineral resources would be suspended until the conditions for mature mining were not met. After August 1, 2023, all exploration, mining, processing and other operations in the mine will cease. Myanmar is the first source country for China's tin ore imports. According to customs data, in 2022, China imported 187,300 tons of tin ore from Myanmar, accounting for approximately 77% of China's total imports. The tin concentrate production in the Wa region accounts for about 50% of the total production in Myanmar. If tin mines in the Myanmar region stop production after August 1st, it will have a significant impact on domestic tin supply. Under the influence of this news, domestic Shanghai tin rose by the limit on the day of the 17th and another 6.93% on the night of the 17th.

On the supply side: Currently, there is not much change in the overall supply and demand in China, and the attitude of smelters towards high prices still exists. The overall operating rate in China remains relatively stable at around 60%. However, based on the import situation of tin concentrate from January to February, the import volume decreased by 23.1% year-on-year, and the supply at the mining end is still tight.

In terms of demand, it remains weak and shows little signs of recovery in the short term. Currently, the main application field of tin in China is the electronics industry. In the downstream consumption structure of refined tin metal, soldering tin accounts for about 44% of the market share, while tin plates account for about 16% of the market share. Therefore, the development of the electronics industry, including the new energy industry, has a significant impact on tin. According to data from the National Bureau of Statistics, the output of integrated circuits from January to February 2023 was 44.3 billion pieces, a year-on-year decrease of 17%. According to SunSirs, due to the poor performance of electronic orders in the near future, the operating rate of solder companies has remained stable in the near future, and it is expected that there will be no significant changes in the future.

In terms of inventory, LME inventory is currently at a low level, while domestic inventory is still relatively high. However, there have been slight signs of destocking since last week, and there has been some improvement in tin prices since the end of last week

Market outlook

Overall, downstream demand is still weak, and in the short term, the market will significantly increase due to the news of the planned production halt in Wa State. However, the impact of this news on subsequent fundamentals is still unclear. In the short term, the impact of domestic supply and demand on tin prices remains limited, and in the future, it is still necessary to focus on the impact of domestic and foreign macro factors on the market.

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