In the short to medium term, Q2 will be a period where domestic supply and demand are tight. Follow-up attention will be paid to the resumption of production in Wa. It is expected that there will be limited space below tin prices in the short term, and falling prices will drive downstream procurement sentiment to accelerate the elimination of domestic inventories.
The Zhitong Finance App learned that Huafu Securities released a research report saying that imported Myanmar mines declined as scheduled in April. In the short to medium term, Q2 will be a period of tight domestic supply and demand. Follow-up attention will be given to the resumption of production in Wa. It is expected that there will be limited space below tin prices in the short term. The fall in prices will drive downstream procurement sentiment to accelerate the elimination of domestic inventories, and overall tin prices fluctuate at a high level. In the long run, the increase in tin ore supply is limited in 2024. Demand for demand-side photovoltaics, new energy vehicles, and AI tin continues to be optimistic. It is recommended to focus on tin shares (000960.SZ), Huaxi Nonferrous (600301.SH), and Societe Generale Silver Tin (000426.SZ).
The main views of Huafu Securities are as follows:
Tin ore: imports of Myanmar ore declined as scheduled in April
In April, the amount of crude metal in imported tin concentrate was 4,288 tons (Myanmar 783+Congo gold 1,620), -826 tons/ -16.2% year on year, 2,270 tons/ -34.6% month on month. The cumulative amount of imported metal in January-April was 22,110 tons, +490 tons/ +2.3% year on year. Imports of Myanmar mines have declined as scheduled, and the tight domestic raw materials situation will continue. However, there are still no clear guidelines for the resumption of production in Wa State, and the shutdown period has exceeded expectations.
Tin ingots: production is still high, and net exports of fine tin are at a historically high level
1) In April, China produced 16,545 tons of fine tin, +10.7% year-on-year and +6.4% month-on-month, of which recycled tin accounted for 27.3%. From January to April, China's cumulative fine tin production was 43,561 tons, +1.7% year-on-year. 2) In April, China imported 734 tons of fine tin (Indonesia 0+Malaysia 0+Peru 641), 118 tons/ -13.9% month-on-month, -1,279 tons/ -63.5% year on year. The closing of the import window affected overseas fine tin imports. In January-April, a total of 6,626 tons of fine tin were imported, +149 tons/ +2.3% year on year. 3) In April, 1,922 tons of fine tin were exported, +910 tons/ +90.0% year on year, +431 tons/ +28.9% month on month. In January-April, 5,421 tons were exported, +1,134 tons/ +26.5% year on year.
Apparent consumption of fine tin increased slightly month-on-month
The apparent consumption in April reached 13,500 tons, -10.4% year-on-year, +8.0% month-on-month. The cumulative apparent consumption in January-April was 52,800 tons, +0.3% year-on-year. Huafu Securities pointed out that the recovery in refined tin consumption fell short of expectations. The apparent consumption in April had not yet reached the high monthly level. High tin prices caused limited downstream delivery to curb consumption. It is expected that after prices fall back, there will be obvious inventory replenishment to drive demand release.
Terminal consumption has cooled slightly, and new energy sources have continued to grow
1) Integrated circuit production in April was 37.3 billion yuan, +35.9%/+34.7%, with a cumulative total of 135.4 billion yuan in January-April, or +35.9% year-on-year; in the terminal market, domestic mobile phone and computer equipment production declined month-on-month in April, and the production of household appliances for air-washing is still relatively high. 2) In fields such as photovoltaics and new energy vehicles, the cumulative annual output still achieved a high increase.
Risk warning: Downstream demand fell short of expectations, and Myanmar mine imports exceeded expectations.