Slumping Tin Ingot Prices Are Dwindling The Demand Outlook

Tin ingot prices in China fell in early July due to price recession fears amidst the output cuts. According to market participants, domestic Tin ingot inventory was destocked last week, as lower spot prices led to a slight improvement in purchasing willingness in the spot market. Tin inventories on the London Metal Exchange remained relatively stable. The import offers have been closed again, and there were only a few quotes on the market for imported Tin. The most actively traded Shanghai Futures Exchange (SHFE) Tin contract found support at the recent low and rallied slightly last Friday night. Additionally, some manufacturers are withdrawing because they purchased Tin concentrate at a higher price and would lose money selling Tin at current prices. Shanghai Futures Exchange (SHFE) Tin will trade sideways at lows due to broadly balanced supply-demand dynamics and solid wait-and-see sentiment.

Fears of a global recession prompted by aggressive interest rate hikes by the Fed and central banks in other countries contributed to Tin's deteriorating performance. Investors believe that the increase in interest rates will slow the pace of global economic growth and that it will reduce global demand for Tin. Furthermore, the uncertainty of economic recovery caused by the resurgence of Covid cases has prompted the re-imposition of restrictions in several Chinese regions, and this circumstance has provoked a hostile sentiment toward Tin prices.

Samsung Electronics in South Korea has temporarily halted new orders and requested suppliers to delay or reduce part shipments for several weeks due to high stock levels. Furthermore, falling South Korean semiconductor exports are weighing on tin demand and prices later this year. Moreover, the Indonesian government is revising the Tin royalty rate. The proposal is to change the previously fixed royalty rate of 3% to a variable rate. This policy shift will impact Indonesian tin exports to the global market.

According to ChemAnalyst, "Consumer spending cuts have reduced demand for electronic goods, resulting in lower consumption of the soldering metal Tin, but production cuts are likely to be balanced this year. Also, the Indonesian government plans to ban Tin exports next year will increase the value of domestic processed Tin products and encourage downstream development in Indonesia."