According to the monitoring of the commodity market analysis system of Shengyi Society, this week (1.26-1.30), the 1 # tin ingot market in East China first rose and then fell. The market average price at the beginning of the week was 438600 yuan/ton, and as of January 30th, the market average price was 427370 yuan/ton, a decrease of 2.56%.
The trend of tin prices shows a trend of first rising and then falling, which is mainly due to changes in the supply and demand pattern, fluctuations in macro environmental factors, and fluctuations in market sentiment.
Macroscopic perspective
The recent weakness of the US dollar has made metal products priced in US dollars more attractive to buyers holding other currencies. At the same time, the prices of precious metals continue to rise and break historical records, spreading the market’s enthusiasm for investing in hard assets to the industrial metals sector. As speculative buying continues to pour in, investors are betting that industrial metal prices will further rise. However, due to excessive speculative behavior, industrial metal prices have clearly deviated from their fundamental support, and high prices have to some extent suppressed the actual purchasing demand of industrial users. In response to this situation, China has introduced position restriction measures and continuously strengthened regulatory efforts. Subsequently, under the pressure of profit taking, the bullish sentiment in the market has cooled down.
supply side
The production recovery process in the Wa State region of Myanmar is slow, and it is expected that tin production in January will be less than 1000 tons, and achieving comprehensive production increase may take until the second half of the year. On the Indonesian side, due to the impact of the export license approval process, trading activities of tin ingots have come to a standstill in the first 20 days of January, leading to supply shortages. The domestic situation in the Democratic Republic of Congo is unstable, and its tin supply faces a high risk of interruption.
Domestic smelters maintain a high operating rate, but the shortage of waste tin raw materials remains prominent, especially in Jiangxi where the production of refined tin is relatively low and the overall supply growth rate is limited. Although the processing cost of tin ore has been raised and the profit recovery expectation of the smelting process has increased, it is difficult to achieve a significant increase in supply in the short term due to the constraint of waste supply.
Demand side
Consumer electronics and home appliance orders are weak, and the demand for tin in the solder industry is sluggish. Although there are short-term export expectations brought about by the cancellation of export tax rebate policies in the photovoltaic field, high priced raw materials weaken order growth and overall consumption support is limited. The demand for tin in high-end manufacturing fields such as AI servers and new energy vehicles is growing, but the current increase in emerging demand is not enough to compensate for the decline in traditional demand. Downstream acceptance of high priced tin is still low, and the willingness to replenish inventory is weak.
In the spot market, the price experienced a high phase in the early stage, and thereafter market participants generally held a cautious attitude. At the same time, inventory levels continue to rise, reflecting weak consumer demand in the short term. Recently, the position restriction policy introduced domestically has effectively suppressed short-term speculative behavior, and market sentiment has also changed accordingly. After a certain degree of price decline, the willingness to trade has increased, and merchants generally report an increase in shipment volume. However, there has been no significant improvement in the overall demand situation.
comprehensive analysis
Short term tin prices are expected to remain volatile at high levels, and the tight supply pattern has not changed. However, the game between weak reality and strong expectations on the demand side will continue. Attention should be paid to the progress of Myanmar’s resumption of production, Indonesia’s export policies, and the actual release of emerging demand.
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