Most tin smelters in the Yunnan, Guangxi and Jiangxi provinces of have suspended or scaled back refined tin production following special environmental inspections by the Chinese government that began on July 19.

Environmental inspection teams were sent to eight provinces, representing the country’s major nonferrous metals production areas. Some of the smelters are expected to remain idle for more than a month due to plant relocations or equipment maintenance, with specific restart dates yet to be determined. For example, the Guangxi China Tin Group initiated a complete month-long shut down for maintenance on July 15. The total annual production capacity of tin smelters involved approaches 110,000 tonnes, with output in 2015 of some 70,000 tonnes accounting for around 45% of the national total.

The smelters’ centralized shutdown has lasted for nearly a week so far, which has caused some initial tightness in supply. The China domestic tin price jumped sharply on Wednesday, with the Shanghai tin price rising to a high of 121,900 yuan, while the spot price also climbed to about 121,000 yuan, representing an increase of over 3% from around 117,000 yuan last week. If the cuts are extended, then the domestic supply tightness will be exacerbated in the short term, leading to continued upwards pressure on domestic tin prices.