Local sources indicate that Gejiu Kaimeng has begun routine maintenance on its tin smelter.
The company, that’s full name is Gejiu Kaimeng Industry and Trade Co., Ltd, is one of the many smelters in Gejiu, Yunnan province, China. The smelter currently produces some 600-700 tonnes of refined tin every month.
The routine maintenance will cover crude tin production and refining, amongst other processes, which will cease for around one month. Production is expected to resume in the new calendar year.
Our view: With Kaimeng halting output for around one month, this should help other smelters in Yunnan province. With the recent closure of the China-Myanmar border, refined tin producers have been struggling to secure raw materials’ supply; one less competitor should ease this somewhat.
However, Kaimeng’s maintenance may exacerbate the tight supply of metal in China. Currently, the market is in a steep backwardation – an unusual feature for China – indicating willingness to pay more for prompt delivery of refined tin. However, as the maintenance is routine, the company is likely to bring the smelter back online promptly.