Inventory turning point show tin prices rise shock

At the end of February, Shanghai Tin main contract prices fell high.From the macro point of view, the current global liquidity is sufficient, good tin prices.From the fundamental point of view, the steady recovery of terminal demand, tin ore supply short-term problems, fundamentals also good tin prices.

Liquidity sufficient positive tin prices

Since the beginning of this year, a number of new coronavirus vaccines have been launched around the world, the overseas epidemic has slowed down, the number of newly confirmed COVID-19 cases in the US per day has decreased, and the manufacturing PMI index in the US, EU and Japan has gradually shaken off the low level and recovered to near the line between expansion and contraction. The market is expecting a recovery of the global economy.In addition, U.S. President Joe Biden's $1.9 trillion economic stimulus policy, the global market easy liquidity to support tin prices.

Domestically, the Ministry of Finance said recently that China will continue to implement a proactive fiscal policy and a prudent monetary policy to avoid premature withdrawal of economic support measures.By the end of February, the stock of social financing was 291.36 trillion yuan, up 13.3% year on year.At the end of February, the outstanding M2 money supply was 223.6 trillion yuan, up 10.1 percent year on year, up 0.7 percent and 1.3 percent respectively from the end of January and the same period last year.In the short term, domestic liquidity remains abundant.

End demand picks up

China is the largest tin consumer, the performance of its terminal industry directly affects the consumption of tin.China's tin consumption is more concentrated, more than half for tin solder.And tin solder is widely used in household appliances, automobile manufacturing and other industries.From the point of view of terminal data, the performance of the home appliance industry has picked up.The cumulative output of refrigerators in the first two months of this year was 12.107 million, higher than the 6.67 million in 2020 and 10.99 million in 2019.From January to February, the cumulative output of washing machines in China was 13.135 million, higher than 7.757 million in the same period in 2020 and 10.85 million in 2019.From January to February, the cumulative output of air conditioners in China was 29.404 million units, higher than 16.285 million units in the same period in 2020 and 27.885 million units in the same period in 2019.Statistics show that China's white goods industry has picked up significantly, even more than in 2019.Not only the domestic home appliance market picks up, the external demand turns good also promoted the home appliance export, promoted the tin demand.1 ~ 2 months, the cumulative amount of air conditioning, refrigerator, washing machine 10.46 million units, 10.91 million units and 3.82 million units, respectively, not only the total exports significantly higher than the same period in 2020, it also improved compared with the same period in 2019, it shows that major economies overseas economic rescue directly increase the residents' income, while outside the outbreak there are repeated, for home quarantine against outbreaks, residents' willingness to buy home appliance to improve, and our country because of the outbreak control properly, the economy revived, stable performance of manufacturing, so order to China, to promote home appliance export positive.

The performance of the home appliance industry is greatly affected by the real estate industry.From January to February, the completed housing area was 135.2497 million square meters, with a year-on-year increase of 40.40% and 63.3%.From January to February, the cumulative floor space of housing sales increased by 104.9% year on year.The increase in housing sales area will continue to drive the demand for home appliances, which will drive the demand for tin.

In addition, the statistics of China Association of Automobile Manufacturers show that from January to February, the production and sales of automobiles reached 3.89 million and 3.958 million units respectively, up 88.9% and 76.2% year on year respectively, and up 2.9% and 2.7% compared with the same period in 2019.

On the supply side, although China's tin reserves rank first in the world and its refined tin capacity accounts for more than 50% of the world's total, it still imports tin from other countries.Since China's tin refining capacity is mainly concentrated in Yunnan Province, China mainly imports tin ore from Myanmar. However, Myanmar's coup in March still needs time to restore domestic order. In the short term, it may take longer time for the import of tin ore from Myanmar to China.From January to February, China imported 16986.35 tons of tin ore from Myanmar, which was lower than 23,115.17 tons in 2020 and 32,483.15 tons in 2019.Tin supply tight, good tin prices.

From the inventory level, as of March 30, the last period of tin futures inventory of 8020 tons, although still in the same period of nearly five years of high, but from the seasonal characteristics, after April, inventory will begin to enter the storage stage, with the continuous decline of inventory, tin prices will strengthen the upward momentum.

Tin terminal demand warming, and tin supply due to the coup in Myanmar and become not smooth, good fundamentals tin prices.Technically, the current Shanghai tin under the upward trend line has not been broken, and the recent dollar index continued to strengthen, broke through 93 points on March 30, or to bring a certain amount of resistance to tin prices up, the short term is expected to be strong tin shock, attention to the integer pass 180,000 yuan/ton line resistance.At the same time, it is suggested to pay attention to the impact of the dollar index on tin prices.