Weak demand in April 2023, tin prices slightly dropped by 0.5%

According to the Commodity Market Analysis System of Business Society, the domestic 1 # tin ingot market fell first and then rose in April 2023. The average price in the domestic market was 208110 yuan/ton at the beginning of the month and 207060 yuan/ton at the end of the month, with a monthly decrease of 0.5%.

 

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On April 25th, the base metal index was 1228 points, a decrease of 7 points from yesterday, a decrease of 24.01% from the cycle’s highest point of 1616 points (2022-03-09), and an increase of 91.28% from the lowest point of 642 points on November 24th, 2015. (Note: The cycle refers to the period from December 1st, 2011 to the present).

 

On April 25th, the tin commodity index was 108.03, a decrease of 0.81 points from yesterday, a decrease of 42.45% from the cycle’s highest point of 187.70 points (2022-03-09), and an increase of 152.05% from the lowest point of 42.86 points on December 9th, 2015. (Note: The cycle refers to the period from September 1st, 2011 to the present).

 

The K-bar chart of commodity prices uses the concept of a price trend K-line to reflect weekly or monthly price fluctuations in the form of a bar chart. Investors can buy and sell investments based on the changes in the K-bar chart. Red indicates an increase; Green indicates a decline; The height of the K-bar represents the range of fluctuations. From the monthly K-bar chart, it can be seen that tin prices have been mainly declining in the past six months, with significant declines occurring in May at -18.54% and June at -22.32%. After entering November, prices have been the main trend, with monthly increases exceeding 10%. After entering February, the market fell, with a monthly decline of 11.35%. From the weekly K-bar chart, it can be seen that the recent rise in tin prices has been more or less negative.

 

In April 2023, the tin market fluctuated and declined in the first half of the month, while experienced significant fluctuations in the second half. In the first half of the month, the overall performance of the tin market was weak, and under the dual weak supply and demand pattern, downstream demand remained weak. Without actual demand support, it is expected that the tin market will maintain a weak overall operation. In the short term, the impact of domestic tin prices is still limited, and tin price fluctuations mainly follow international macro trends. Starting from April 15th, under the influence of a sudden news, tin prices rose first and then fell in the second half of the month, experiencing significant fluctuations. 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. Myanmar, as the largest importer of China, accounts for about 50% of the tin concentrate production in the Wa region mentioned in the notice. 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 rose by another 6.93% on the night of the 17th. After the news of Wa State was digested by the market around the 18th, it was difficult for Shanghai Tin to have support, and prices continued to decline, falling continuously.

 

On the supply side: Currently, there is not much change in the overall domestic supply and demand, and the attitude of smelters towards high prices remains unchanged. The operating rate remains at a relatively stable level of around 60%. However, based on the import data of tin concentrate, in March 2023, the physical import volume of tin concentrate in China was 21927 tons, with a metal conversion volume of 5879.5 tons, an increase of 29.9% compared to the previous month. However, due to the end of dumping in Myanmar this year, the year-on-year data has decreased significantly, reaching 33.5%, indicating that 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 Business News, 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. Overall, downstream demand is still weak, and the impact of domestic supply and demand on tin prices is still limited in the short term. 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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According to data from the General Administration of Customs, the cumulative import volume of tin ore sand and its concentrate in China in March 2023 was 21927 tons (equivalent to 6766.8 metal tons), a year-on-year decrease of 24.35% and a month on month increase of 27.67%. Among them, the import volume from Myanmar in March was 16787 tons (equivalent to 4196.6 metal tons), a year-on-year decrease of 22.22% and a month on month increase of 25.94%; Except for Myanmar, the total import volume from other countries in March was 5140 tons (equivalent to 2570.2 metal tons), a year-on-year decrease of 30.58% and a month on month increase of 33.68%.

 

The latest report released by the World Bureau of Metals Statistics (WBMS) shows that in February 2023, global refined tin production was 28800 tons, consumption was 24900 tons, and supply surplus was 3900 tons. The global tin ore production in February 2023 was 24300 tons.

 

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 187300 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 the tin mines in Myanmar stop production after August 1st, it will have a significant impact on the domestic tin supply.

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