After strong growth earlier in 2011, Chinese refined tin production in December decreased by 38% year-on-year to 9,056 tonnes according to National Bureau of Statistics data. This was the lowest monthly production figure since February 2009.The NBS provisional annual total for China’s refined tin production in 2011 was 155,855 tonnes, up by 4.9% year-on-year.

The drop at the end of the year was in response to falling prices and reduced raw materials availability. The China domestic price collapsed in December under the pressure of large imports and weaker LME prices. Many smelters reduced their production to deal with downside price risk. Moreover, concentrate suppliers preferred to hold the raw material rather than sell them with lower price. Scrap generation also decreased since the operating rate of electronics manufacturers declined in November and December.

Market conditions have improved in January. The China domestic price has rebounded from a low of RMB 158,000 yuan (US$25,000) to 171,500 yuan (US$27,100), up by 8% in the past two weeks. The China price has been supported by consumer restocking and the reluctance of suppliers to sell before Spring Festival holiday, as well as the recovery in the LME price.