Recently, tin, known as the "industrial monosodium glutamate", has seen its price soar by more than 10,000 CNY in a single day, firmly rising to a new high in two and a half years. This price anomaly has made it the focus of market attention.

On December 12th, the domestic spot tin price continued to rise after breaking through the psychological barrier of 3.3 million CNY per ton. According to Wind data, the price of tin (1#) reached 331,640 CNY/ton on that day, up 10,870 CNY from the previous day, with an accumulated increase of about 37% year-to-date, reaching the highest level since June 2022. During the same period, the main contract of Shanghai tin futures also closed significantly higher, and the market's positive sentiment was evident.

The strong performance of this round of prices is mainly due to the continuous impact of supply disruptions in major overseas mining areas and the stable support of downstream industries such as semiconductors. The interaction effect is attracting widespread attention in the market.

01 Supply contraction and strong demand push tin prices higher

Tin is a relatively scarce variety among base metals. According to data from the United States Geological Survey (USGS) and the International Tin Association (ITA), the global static reserve-to-production ratio of tin in 2024 is approximately 16 years, and the long-term supply base is not abundant. At the same time, frequent disturbing events in multiple key tin mining areas overseas have continuously exacerbated the tension in the global market.

Specifically, first and foremost, it is the Myanmar Wa State, which has long been an important source of China's tin concentrate imports, but recently its resumption progress has continued to fall short of market expectations, and the export volume has remained at a low level. Data shows that in October, China's imports of tin concentrate from Myanmar decreased by -62% year-on-year and -25% month-on-month. At the same time, there is also turmoil in the main production areas in Africa: the Bisie tin mine located in the east of the Democratic Republic of the Congo, which accounts for about 6% of global supply, has encountered armed conflict, raising market concerns about the possible long-term impact on the operation of mines in this area. In addition, Indonesia, the world's second-largest tin producer, saw a decline in refined tin exports after launching a special operation to crack down on illegal tin mines at the end of September, which exacerbated market tensions. Data shows that the country's refined tin exports in October decreased by -54% year-on-year and -45% month-on-month. The global tin stock, especially the explicit stock in overseas exchanges, is at a historical low, which further strengthens the vulnerability of the supply side and provides a solid bottom support for the price.

Corresponding to the turbulent supply side, the demand structure of tin is undergoing profound and positive changes, providing a solid foundation for the long-term price center to rise. Traditionally, tin chemical (such as PVC heat stabilizer) and tin-plated sheet (can) are the main consumption fields of tin, but these fields are highly correlated with the prosperity of real estate, traditional packaging and other industries, and the current growth is weak. The real new momentum for tin consumption is represented by the emerging industries such as semiconductors and new energy.

Semiconductors are at the heart of this transformation. According to data disclosed by ITA, in 2024, tin-rod solder accounted for 66% of China's tin consumption market, and most of this solder is used in semiconductor-related parts. Since the beginning of this year, the global semiconductor industry has experienced a rise in prosperity. Data from the Semiconductor Industry Association shows that global sales reached $627.6 billion in 2024, a year-on-year increase of 19.1%. The wave of artificial intelligence (AI) servers, smart devices, and automotive intelligence has created a demand for high-end solder that far exceeds traditional consumer electronics. According to CICC analysis, driven by AI, the compound annual growth rate of tin-rod solder demand is expected to reach 7% from 2024 to 2030. In addition, the green energy revolution has also opened up new growth space for tin. The production of photovoltaic heterojunction (HJT) cells requires tin soldering belts. With the continuous high-speed growth of global photovoltaic installed capacity, this part of demand is becoming an incremental amount that cannot be ignored. This "high-end" and "green" shift in demand structure has made tin consumption less sensitive to price and has enhanced its demand resilience. The strong growth of the industry directly translates into a rigid purchasing demand for upstream tin-rod solder.

02 The paths of related mining enterprises are differentiating, and multi-dimensional measures are ensuring resource security.

The historical high of tin prices and the re-evaluation of market prospects are triggering a chain reaction in the capital market and at the industrial level. In the A-share market, companies listed on the stock exchange representing the tin industry chain, such as Tin Industry Shares, Xingye Yinxing, and Huasi Non-Ferrous, have become the most direct beneficiaries of this round of the situation, with stock prices and performance rising in unison.

As of the close on December 15, the year-to-date gain of Xingye Silver and Tin stock price was 213.07%, Huaxi Color Metal was 135.74%, and Tin Industry shares were up 90.46%.

Behind the beautiful stock price is solid performance support. The operating income of the above companies in the first three quarters all showed a significant increase, with Xingye Bank's revenue increasing by 24.36% year-on-year, Huaxi's non-ferrous metal increasing by 21.16%, and Xiyao's shares also increasing by 17.81%.

More importantly, leading enterprises are not content with the short-term benefits of price increases, but are using the current favorable window and financial advantages to actively carry out horizontal and vertical strategic layouts to consolidate long-term competitiveness.

Faced with the industry-wide challenges of tight global tin mine supplies and frequent disruptions overseas, each of the leading companies has taken a differentiated path to resource expansion based on their own capabilities.

The "radical" action of JSC Industrial and Commercial Bank of Xingye provides a perfect example of a "dual-track" approach. In terms of domestic integration, its wholly-owned subsidiary recently plans to acquire a controlling stake in Weiling shares for 308 million CNY, thus obtaining the rights to a tin polymetallic mine in Hunan and further consolidating domestic resource reserves. In terms of overseas layout, the company has made a key move - through its subsidiary, it has completed 100% control of Atlantic Tin Co., Ltd., which owns the large tin mine in Africa, Achmmach. In order to support these expansions, the company's board of directors has passed a proposal to issue overseas bonds of no more than 300 million US dollars for its subsidiaries to guarantee, in order to broaden overseas financing channels.

In comparison, the strategy of lead-zinc resources is more conservative and focused. Its resource strategy is more reflected in the deep potential and efficiency of existing core assets. In 2024, the company added 17,600 tons of tin resources and 34,800 tons of copper resources through mine area geological comprehensive research and deep marginal ore exploration, effectively offsetting the natural decline trend of tin ore production. At the same time, the company plans to systematically improve the self-sufficiency rate of tin concentrate and build a tailings resource utilization base to open up a stable secondary raw material source.

Huaxi Color started from technological innovation, and built the only "National Engineering Laboratory for Efficient Utilization of Indium Tin Resources" in China, promoting the efficient recovery and deep processing of tin resources, improving the utilization rate of resources, and reducing the dependence on primary mines.

This series of actions clearly outlines that major enterprises are expanding their resource map through different paths, either aggressive or steady, to cope with long-term structural shortages under the high-landscape cycle of the industry.

03 Outlook for the rest of the week: Higher in a volatile range

Looking ahead to the future market, the complex situation of "strong expectations" and "weak reality" coexisting in the tin market may continue. On the one hand, the structural shortage of mine supply is difficult to solve in the short term, and the global low inventory state provides rigid support for prices; while the expectation of interest rate cuts by the US Federal Reserve brings a relaxed liquidity atmosphere, which may continue to boost the prices of major commodities including tin at the macro level. Many institutions are optimistic about the short-term tin price and predict a short-term increase.

On the other hand, the high prices have begun to have a dampening effect on downstream consumption. Some analysts pointed out that with the slowdown in the growth rate of industries such as photovoltaics and the high prices, the willingness of downstream players to take delivery has weakened, and the consumption of refined tin for the whole year may show a slightly surplus pattern. This means that it is difficult for the tin price to have a smooth one - way upward trend, and it is more likely to show an "oscillating upward trend". Researchers from Guangzhou Futures analyzed and believed that the current market has already priced in some supply risks, and new catalytic factors are needed to further push up the price.

To sum up, the current surge in tin prices is not merely a simple cycle repeat, but a "market storm" catalyzed by the essence of resource scarcity, geopolitical disruptions, and the demand from the industrial revolution.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.