This week, the 1 # tin ingot market in East China fell, with an average market price of 415370 yuan/ton on July 20th and 411670 yuan/ton as of July 24th, a decrease of 0.89%.
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This week, tin prices showed a typical trend of “rising first and then falling”. At the beginning of the week, they were strongly boosted by geopolitical premiums and low inventory support, fluctuating at a high level in the middle of the week, and experiencing a fierce pullback over the weekend.
Macroscopic perspective
The macro level constitutes the main suppressive force. The non farm payroll data for May in the United States exceeded expectations and was strong. Expectations of a Federal Reserve interest rate hike sharply increased, and the US dollar index hit a 13 month high, putting overall pressure on US dollar denominated base metals. At the same time, the Nasdaq and Philadelphia Semiconductor Index experienced two rounds of sharp declines, directly impacting the demand expectations for “computing power metals”, and the AI narrative that had previously supported the strengthening of tin prices was temporarily shaken.
Supply and demand side:
On the supply side, the mining side continues to be tight, but the margin has not deteriorated. Myanmar’s resumption of production fell short of expectations. The Wa State in Myanmar is currently in the rainy season (May to July), and the progress of resuming production in mining areas continues to be slow. The mining ban policy has not been substantially relaxed yet. The tight mining situation has not changed, but the rainy season is a seasonal factor, and the market has already had sufficient expectations for it. Indonesia’s exports have declined. The Indonesian government continues to crack down on illegal mining and tighten export regulations, resulting in a year-on-year decline in refined tin exports, further narrowing the global supply elasticity. The overall stability of domestic smelting production. The overall production of smelting plants in Yunnan and Jiangxi is stable, and the tight mining situation has not yet transformed into a significant reduction in refined tin production.
On the demand side, there is a strong sense of fear and wait-and-see attitude downstream. After the sharp rise in spot prices, downstream companies maintained their demand for essential purchases and on-demand access, while the procurement of solder and electronic enterprises above 410000 yuan/ton significantly slowed down. Being in the traditional off-season of consumption, the actual consumption intensity is not as expected. Relative preference for soldering orders. Soldering has stable demand support and strong support for tin prices; But the overall market situation is average for shipments, and some traditional consumer sectors still need to recover. AI needs to provide structural support. AI servers use four times more tin than traditional devices, driving the global tin market to experience a shortage of nearly 10000 tons for the fifth consecutive year. Green transformation, electrification, and the AI industry can help boost additional demand.
Inventory end
The simultaneous destocking of the two major exchanges has provided the strongest bottom support for tin prices due to low inventory.
comprehensive analysis
It is expected that tin prices will continue to fluctuate at a high and wide range next week, with resistance in the range of 420000-425000 yuan/ton. Lower support: in the range of 400000 to 406000 yuan/ton. Low inventory and supply risk provide strong support around 400000 yuan/ton.
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