Analysts from SMM and ITRI presented similar views on Chinese refined tin supply at the SMM Tin Conference in Suzhou at the end of last week, but rather divergent estimates of demand.
While SMM analyst Wu Xiaofeng predicted that China tin consumption would grow by only 2.6% to 156,000 tonnes in 2014, Cui Lin, Chief Representative of ITRI China forecast an increase of 4% to 162,100 tonnes this year. She noted that solder shipments are rising and we have seen many new companies enter the business in the last 2-3 years. Although the usage in traditional electronic products seems to be flat, tin use in LED lighting, automotive electronics, lead acid batteries and tin chemicals are quite positive.
Chinese companies at the conference reported that sales of solder bar and wire have been good so far this year, although the industry is very competitive now. The solder companies are widely facing very serious financial pressure because they have to give electronics manufacturers longer payment term (usually more than one month) but pay cash to buy tin ingot from smelters.
Both analysts agreed that China’s refined tin production would exceed usage this year, mainly as a result of much increased availability of Myanmar concentrates. Cui Lin estimated that China tin exports were more than 8,000 – 9,000t in the first eight months. But the flow has been stopped from the end of August because of the big fall in the LME price, eliminating the profit margin for any kind of arbitrage exports.
