SMM: The Shanghai tin soared, but the spot market lacked follow-up strength. Both upstream and downstream sectors are stuck in a situation where there is price but no market.

The futures market is limit-up strong, while the spot market quickly freezes. Both buyers and sellers are in a wait-and-see mode before historical highs. In terms of brands, mainstream market cloud-headed tin contracts are offering premiums of 700-800 yuan per ton, with higher quality cloud tin offering premiums of around 1200 yuan per ton. Despite the firm quotations, actual market trading is extremely light, with a situation of having prices but no market becoming evident. Most smelters choose to hold prices for sale. Due to high raw material costs, tin concentrate processing fees have been at historically low levels for a long time, severely squeezing enterprise profit margins. At the same time, high prices have stimulated a large number of ore point prices, further leading to difficulties in spot sales for smelting enterprises, with some enterprises instead opting to sell through futures market to hedge risks. Downstream welding material companies are nearing their limit in terms of their ability to bear the current high tin prices. According to SMM research, spot market transactions are almost stagnant, with the limit-up prices during trading completely suppressing the purchasing intentions of downstream and terminal enterprises. Market transactions are only maintained by a small amount of rigid demand, overall trading is sluggish, and downstream enterprises are generally turning to a wait-and-see approach due to high prices. The pattern of weak supply and demand before the Spring Festival is expected to continue. With domestic consumption gradually decreasing in the second half of January, downstream enterprises may enter holiday mode early in February. In the short term, the tin price is likely to remain volatile at high levels, with close attention to Myanmar's export data and changes in Yunnan tin concentrate processing fees.