Spot Chinese refined tin supply is expected to be tight in July and August on environmental protection inspections in eight regions in mainland China, the tin branch of China Nonferrous Metals Industry Association said on its website Thursday.
The CNIA report said that last week tin smelters in Yunnan Province, Central China, Jiangxi Province, South China, as well as Guangxi Zhuang Autonomous Region, Southwest China suspended production. It added that some private tin smelters in Yunnan have already halted production for several days, while in Jiangxi, smelters virtually all halted smelting, with restart of operations yet to be decided.
The association said that due to the shutdowns, spot domestic tin supply in July and August is expected to be tight.
CNIA said after a State Council meeting back on July 6, environment protection inspectors then stationed in eight zones-- the autonomous regions in Inner Mongolia, Ningxia Hui, Guangxi, Jiangsu province in East China, Jiangxi Province in South China, Henan Province in Central China, as well as Yunnan Province in Central China-- with environment inspection expected to last for one month.
Meanwhile, a total of close to 110,000 mt/year tin smelting capacity in China is currently either shut or involved in output cuts, accounting for around 45% domestic smelting capacity, the Shanghai Metal Exchange said in a report in its website Thursday.
The exchange report said if the output suspensions continue, it will intensify domestic spot supply tightness and keep pushing up prices.
Following the news of domestic tin smelters' shutdown, domestic tin prices surged Thursday. The most active Shanghai Futures Exchange tin futures contract, September, hit Yuan 121,340/mt ($18,201/mt) at Thursday close, up Yuan 1,130 from Wednesday.
China's national refined tin output is forecast to fall 3% on the year to 160,000 mt this year, Chinese metals consultancy Beijing Antaike said in its it tin sector report in mid-June. Antaike predicted China's tin demand would hit 156,000 mt in 2016, up from 154,000 mt in 2015. It forecast China's net refined tin import volume to be 5,000 mt this year, down from 5,416 mt last year.
