LME+SHFE锡库存

　　Data source: wind, compiled by founder medium term Futures Research Institute

　　After nearly doubling the tin price in 2021, the price of Shanghai tin reached a new high at the beginning of this year, and the contract of Shanghai tin stood at the integer level of 320000 yuan / ton in recent months. For the future market, the author believes that the Spring Festival factor will cause a temporary mismatch between supply and demand from January to February, and the tin price will show a trend of first rising and then restraining.
Environmental protection maintenance and holidays
Refined tin production is expected to decline sharply in January
According to SMM research data, the output of refined tin was 14000 tons in December last year, an increase of 5.41% month on month compared with November. In January, Yunnan kaimeng company contributed to the increase in production resumption, but the overall output of some smelters will decline due to the maintenance holiday before the Spring Festival. Meanwhile, Gejiu City issued an environmental protection shutdown notice on January 11, involving tin smelters, but mainly short-term impact. Due to the holiday before the Spring Festival and the shortage of raw materials, some smelters in Guangxi lowered the output expectation of refined tin, which is expected to reduce the output of refined tin by about 700 tons. The output expectation of some smelters in Jiangxi has also been lowered simultaneously due to the arrangement of holidays before the holiday, and the output is expected to decline by about 20% month on month in January; Smelters in other regions stopped production gradually as planned, and the output of refined tin is expected to decrease slightly in January. SMM estimates that the domestic refined tin output in January was 12485 tons, a decrease of 1515 tons compared with December 2021, a month on month decrease of 10.8% and a year-on-year decrease of 21%.
Little supply elasticity
Low inventory is difficult to recover rapidly and significantly
In 2021, the tin price rose strongly under the condition of low inventory and high spot price. The total inventory of LME and the two exchanges in the previous period was less than 2000 tons. At present, the inventory level has rebounded from a low level, but it is still at a historically low level. As of January 11, LME tin inventory was 2055 tons, compared with 1723 tons in the previous period, and the total inventory decreased by 4230 tons compared with the same period last year. Low inventory also caused Shanghai tin to remain in the back structure, and the price difference between months was at a high level. It also caused the cost loss of moving positions and changing months for empty futures orders, thus supporting the tin price.
Before the Spring Festival, downstream enterprises prepared goods and the operating rate of smelters fell, resulting in weak supply and strong demand, and the inventory may continue to decline at a low level. The resumption of downstream production after the festival is later than that of the smelter, and the inventory will be seasonally accumulated under the condition of oversupply. In the long run, due to the continuous shortage of tin in the past few years, the scarcity of new projects in tin mines, the decline of the grade of mines in production and the small supply elasticity, it is difficult for tin stocks to recover rapidly and significantly, which forms a support for tin prices.
High tin prices inhibit downstream consumption
But terminal consumption is booming
Since the fourth quarter of last year, the high tin price has significantly inhibited the downstream consumption, and the downstream purchases more on demand with a strong wait-and-see mentality. The spot contract for Shanghai tin in recent months has changed from the high water rise state of last year to discount, indicating that the transmission of high tin prices to the downstream is not smooth. Near the delivery day, the spot discount also increased the willingness of the holders to deliver futures. Superimposed on the fact that the enterprises were in the stock stage before the Spring Festival, the spot tension helped the tin price rise.
However, terminal consumption remained strong. Since the epidemic, the production and sales of electronic products have been booming, and integrated circuits have developed rapidly. In 2022, China's new photovoltaic installed capacity is expected to reach 75gw, and the tin consumption is expected to increase by more than 25% year-on-year.
In addition, China's policy of "stabilizing the economy" has made great efforts, the expectation of infrastructure recovery is strong, and the superposition of European energy problems continues. Recently, the overall price of non-ferrous metals has strengthened. Under the double benefits of macro and fundamentals, the market is full of enthusiasm, and the tin market presents a situation of simultaneous rise in volume and price.
Overall, the tin market continues the shortage situation in recent years, and the supply elasticity is small, and the low inventory is difficult to recover quickly. With the boost of enterprise goods preparation before the Spring Festival and the reduction of smelter production, the tin price is easy to rise but difficult to fall as a whole. It is expected that the tin price from January to February will show the performance of first rising and then restraining. In terms of operation, it is recommended to participate in or wait-and-see in the short term.
(author: Founder metaphase)