Expectation for tin prices to remain variable in light of macroeconomic updates

Tin prices are anticipated to continue displaying a fluctuating pattern, influenced by macroeconomic news disruptions and weak underlying fundamentals. The impact of elevated prices on consumption is expected to persist as well.

In the broader picture, the US government’s declaration of additional tariffs on Chinese chips by 2027, with a subsequent decision to defer the implementation for a minimum of 18 months, is viewed as a move to improve the China-US relationship. Moreover, the news regarding Nvidia’s intention to supply AI chip H200 to Chinese customers introduces an element of uncertainty into the market. These developments collectively affect investors’ risk appetite. Within the domestic landscape, the tin market demonstrates a subdued supply-demand dynamic.

Regarding the supply aspect, it is anticipated that the production of most smelters will remain reasonably steady in December. On the demand side, the consumption is notably stifled by high prices, with businesses downstream like solder manufacturers exercising caution in their procurement activities. Sectors like consumer electronics and household appliances are experiencing a slowdown in demand. While sporadically, price fluctuations prompt certain enterprises to replenish their inventories due to essential demand when prices drop, resulting in occasional improvements in night session transactions. However, the turnover in the spot market remains subdued most of the time, often characterized by “nominal prices without actual transactions.” Social inventories continue to rise, indicating a trend of accumulation.

Overall, it is expected that tin prices will exhibit a fluctuating trajectory, influenced by a combination of macroeconomic disturbances and weak fundamental factors. The constraining impact of high prices on consumption is likely to persist. Investors are advised to remain vigilant in monitoring changes in spot market transactions and inventory build-up, exercise prudence in their operations, and be cautious of the potential for prices to retreat rapidly after a significant increase.

The article portrays a scenario where a delicate balance needs to be struck amidst various external developments and internal market conditions to navigate the fluctuations in tin prices effectively. The cautionary advice to investors reflects the need for proactive management in response to prevailing uncertainties and challenges in the tin market.