In August, the drag from macro factors on tin prices is expected to moderate, while supply-side disruptions will provide support. As a result, even though consumption is unlikely to improve significantly, tin prices are expected to fluctuate with a bullish bias, trading in a range of Yuan 400,000-440,000/tonne.
On the macro front, although hawkish Fed expectations persist and the Middle East geopolitical situation remains unresolved, slowing growth in U.S. GDP and PCE data has put downward pressure on the U.S. dollar index, which in turn is expected to support dollar-denominated commodity prices.
On the supply side, following the accident at Yinman Mining in Inner Mongolia on 26 July, the company twice received notices requiring the suspension of operations at its mining area and tailings processing system. This news intensified market concerns over tightening mine supply. Therefore, although tin ore supply from Myanmar and tin ingot supply from Indonesia are expected to recover modestly in August, supply-side disruptions are still expected to provide a floor for tin prices.
On the demand side, market consumption is unlikely to see significant improvement in August. Demand from traditional end-use sectors such as consumer electronics and PVC is expected to remain sluggish. Tin demand from the photovoltaic sector, while showing signs of recovery, is expected to be limited, while demand from high-growth sectors such as AI servers is expected to hold steady. Overall, consumption is unlikely to see much upside, which may cause tin ingot destocking to slow or even shift to inventory accumulation, thereby weighing on tin prices.
In summary, with decreasing USD index and sustained supply-side support, tin prices in August are expected to fluctuate with an upward bias, trading within Yuan 400,000-440,000/tonne.
Written by Zhaorui Cui, cuizhaorui@mysteel.com
Edited by Mingyuan Wang, wangmingyuan@mysteel.com
