June 16, 2022

The recent drop in global tin prices might force Chinese tin smelters to cut their capacity utilization to 40% or less, according to the International Tin Association (ITA). Capacity utilization is a measurement of how much available production capacity the industry is using. The ITA also stated on Tuesday that high import volumes have suppressed domestic prices, leading to operational risks and “huge price fluctuations” for tin smelters. Chinese refined tin production was 165,200 tons in 2021, according to Shanghai Metal Market. Based on ITA data, China produced nearly 44% of the world’s refined tin in 2021.

LME Tin Prices have also dropped in recent months. The LME Tin 3M contract was down 14.4% in May, and another 7.9% in June, as last trade was $32,200/mt (7:00 AM CST). This could be a good time for tin end-users such as bronze and brass producers to hedge future needs via swaps. LME Tin is extremely thinly traded, so we would suggest strategically placed limit orders. Using swaps can help guard against a potential increase in tin input costs. Such positions are standard for consumer hedging, but they can result in opportunity costs or cash costs if metal prices decline. Please contact AEGIS for specific strategies that fit your operations. (6/16/2022)

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Price Indications

Today's Charts

AEGIS Insights

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6/12/2022: Top Steelmaker in South Korea Halts Production on Trucker Strike

6/12/2022: POSCO to halt some plants as South Korea trucker strike continues

Important Disclosure: Indicative prices are provided for information purposes only, and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee to the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. Certain information in this presentation may constitute forward-looking statements, which can be identified by the use of forward-looking terminology such as “edge,” “advantage,” “opportunity,” “believe” or other variations thereon or comparable terminology. Such statements are not guarantees of future performance or activities.