A Chinese state-backed industry association said on Tuesday that the tin industry has taken a hit from the “unreasonable” price rally and it called on investors to resist excessive speculative trading.

Tin prices have hit their highest levels in 44 months after a wave of supply disruptions for the material used in circuit-board soldering for products like mobile phones and in electric cars.

“The rapid price surge driven by funds has deviated from industry fundamentals, significantly magnifying market risks and harming the global industry chain,” the tin branch of the China Nonferrous Metals Industry Association said in a statement on its WeChat account.

It called on all parties in the market to “avoid blindly following the trend” and to “resist speculation that violates the objective laws of the market”.

The most-active tin contract FTIN1! on the Shanghai Futures Exchange hit 347,500 yuan ($49,438.75) per metric ton on December 22, its highest price since April 7, 2022.

The benchmark three-month tin price FTIN1! on the London Metal Exchange touched its highest since April 19, 2022, at $43,935 a ton on December 19.

Shanghai and London prices have risen 12% and 10%, respectively, so far this month.

Supply from major producers, such as the Democratic Republic of Congo and Myanmar, has improved with exports of tin ore from Myanmar’s Wa State rising to nearly 1,000 tons, it said, adding that SHFE and LME warehouse stocks have not shown signs of tightness.

China’s refined tin output in the first 11 months rose 6.2% from the same year-earlier period, while global tin consumption is expected to grow by 3%, leaving a supply surplus of around 10,000 tons, it said.

“The sharp price rise has put mounting cost pressure on downstream consumers, eroded their profitability and made it hard for them to fulfill long-term contracts,” the association said.
Source: Reuters