Yunnan Tin Company (YTC) posted record profits over the first half of 2021 on the back of high base metals prices and improved production.

With much of the world investing in infrastructure to recover from the economic impacts of the coronavirus (COVID) pandemic, the price of many base metals have hit recent records. On the Shanghai Futures Exchange (SHFE), the main tin contract closing price averaged 183,231 RMB/tonne, up 39% year-on-year.

As a major producer of tin – as well as copper, zinc, and other by-products – YTC has been in a good position to take advantage of the buoyant market.

With COVID infections extremely low in China, the company was able to bounce back from a restricted 2020 to post improved production numbers across its major products. The company produced some 43,200 tonnes of tin (ingots and products) during the first half, up 25.5%. Copper and zinc output rose 26.1% and 11.1% respectively.

In addition to improved production, sales also rose over the first half of 2021 compared to a year ago. Tin ingot sales were up 59% year-on-year, with copper cathodes and zinc ingots up 17.1% and 8% respectively.

On top of this, YTC also produces some mid-stream tin-containing products. Tin solder and chemicals sales improved by 21% and 12% respectively as tin-using companies further downstream looked to increase their business.

These improvements across the board combined to give YTC a net attributable profit of 960 million RMB. This represents an increase of 375% compared to last year, and is a new record for the company.

Our view: YTC is very likely to post record annual profits this year. The tin price has remained positive over the two months since the first half accounts were finalised. The outlook also remains relatively positive for the tin producer, with tightness remaining in the spot market.

YTC has now finished maintenance at its primary smelter, which began on 28 June. Although longer than normal, the 45-day shut down was completed on schedule, and production has now restarted.