Tin Company Yunnan Tin Undergoes 45-Day Maintenance, Yet Tin Prices Fall Below 390,000: Why Supply Contraction Failed to Support Prices?

Yunnan Tin Undergoes 45-Day Maintenance, Yet Tin Prices Fall Below 390,000: Why Supply Contraction Failed to Support Prices?

Yunnan Tin’s 45-Day Maintenance vs. Tin Prices Breaking Below 390,000: Why Did Supply Contraction Fail to Prop Up Prices?

Apparent supply-side bullishness is overshadowed by macroeconomic headwinds.

01 Trigger

A "Routine" Announcement

On September 28, Yunnan Tin announced that to ensure the safe and effective operation of tin smelting equipment, its Tin Smelting Branch would conduct routine shutdown maintenance for tin smelting equipment. The maintenance began on September 30, 2026, and is expected to last no more than 45 days. By calculation, the maintenance should conclude by around November 14 (estimated). The company stated that this maintenance was included in the beginning-of-year budget and production plan, and will not have a significant impact on the full-year production plan.

Two statements in the source material need correction. First, the maintenance did not "begin recently" but started on September 30; as of October 13, it had been underway for approximately two weeks. Second, the source claims "such Q3 maintenance usually leads to a significant month-on-month decline in monthly output," but this maintenance spans October and November, constituting a Q4 maintenance. According to the International Tin Association, Yunnan Tin’s annual maintenance typically occurs in July and August; this year’s maintenance timing is significantly delayed.

02 Background

Yunnan Tin’s Weight in the Global Tin Market

Yunnan Tin is the world’s largest tin producer. According to company disclosures, tin production reached approximately 91,200 tons in 2025, with a domestic market share of 53.35% and a global market share of 27.16%. Since 2005, the company has consistently ranked first globally in tin production and sales volume. In the first half of this year, the company’s tin production was 51,800 tons, a year-on-year increase of 7.7%; during the same period, the average SHFE tin price was approximately 396,000 RMB/ton, up 51% year-on-year, leading to significant growth in the company’s revenue and profits. In June, the company also acquired 100% equity of Chifeng Dajingzi Tin Industry for 177 million RMB, continuing to expand its resource base.

It should be noted that the "80,000 tons/year smelting capacity" cited in the source refers specifically to the Tin Smelting Branch, whereas the company’s total annual tin production of 91,200 tons includes other production units. Nevertheless, the Tin Smelting Branch remains the most important refined tin smelting base for both the company and domestically; its shutdown cannot be ignored regarding its impact on domestic refined tin supply.

03 Breakdown

How Much Tin Will Be Lost Due to Maintenance?

Based on the Tin Smelting Branch’s annual smelting capacity of 80,000 tons, the average monthly capacity is approximately 6,667 tons. Forty-five days corresponds to approximately 9,900 tons of capacity (estimated). For reference, national refined tin production in January this year was approximately 14,400 tons, dropping to approximately 10,600 tons in February due to the Spring Festival. If the Tin Smelting Branch were to halt production for the entire month of October, the corresponding theoretical monthly capacity would account for approximately 46% of the national January production (estimated).

However, this represents only a theoretical upper limit. The company explicitly stated that the maintenance was included in the beginning-of-year plan, implying that preparations may have been made in advance through higher operating rates and increased inventory; furthermore, not all smelting processes may have completely ceased during the maintenance period. Data from SMM (Shanghai Metals Market) shows that Yunnan smelter operating rates reached a peak of 91.32% in the week of September 4, falling back to 84.78% in the week of September 24, reflecting production arrangements prior to maintenance to some extent. Actual reductions will be smaller than the theoretical value, but the direction of contraction in domestic refined tin supply for October is certain.

04 Breakdown

Supply Side: Three Constraints Exist Simultaneously

In addition to Yunnan Tin’s maintenance, domestic tin supply faces three constraints. The first is Myanmar. As discussed in previous articles by Mineral Cube regarding the resumption of tin mining in Wa State, the Manxiang mining area has currently only recovered to 40%–50% of pre-ban levels. Rainy season drainage issues and shortages of civil blasting materials constrain production, with full resumption postponed until 2027. In July, Myanmar’s exports of tin concentrates to China amounted to approximately 1,077 tons of tin metal content, a 27% month-on-month decrease; imports from Myanmar in August totaled approximately 1,000 tons of tin metal content.

The second constraint is processing fees. Processing fees for Yunnan tin concentrates with 40% grade remain flat at 18,000 RMB/ton, while fees for Guangxi, Jiangxi, and Hunan tin concentrates with 60% grade are 14,000 RMB/ton, significantly compressing smelting margins. By the end of August, the costs for some smelters purchasing external ores exceeded 420,000 RMB/ton, whereas the SHFE tin night session on October 9 broke below 390,000 RMB/ton, placing external ore smelters in a loss-making position. The third constraint is Jiangxi’s operating rate. Jiangxi smelter operating rates remained at approximately 32.32% throughout the month, marking a new low since June.

Overseas, PT Timah of Indonesia produced 12,232 tons of tin concentrate and 10,865 tons of refined tin in the first half of this year, with Indonesian export quotas remaining at relatively low levels; the Bisie mine in the Democratic Republic of Congo (DRC) contributed approximately 17,324 tons of tin contained in tin concentrate in 2024, representing one of the most significant new supply sources in recent years. Overall, global tin ore supply remains in a tight balance.

05 Comparison

Why Prices Did Not Rise Despite Supply Support

By conventional logic, the shutdown and maintenance of the world’s largest tin producer, coupled with slow resumption in Myanmar and declining smelter operating rates, should have provided support for tin prices. However, the actual market movement was precisely the opposite. On October 8, LME three-month tin contracts closed at $51,447 per ton, falling 5.22% in a single day; the SHFE main tin contract SN2610 broke below 390,000 RMB during the night session that evening, hitting a three-month low. On October 9, LME tin rebounded by 3.02% to $53,000 per ton, but Shanghai tin remained weakly positioned around the 390,000 RMB level.

Looking at the longer timeframe, the magnitude of the tin price decline is not insignificant. Tin prices hit record highs in January this year before experiencing a sharp correction in February; supply disruptions in early May pushed prices higher again, with the SHFE main contract closing at 425,960 RMB per ton on May 8, and LME tin closing at $53,650 per ton on May 7. In comparison, on October 9, Shanghai tin broke below 390,000 RMB, representing a decline of approximately 8.4% from early May (calculated). The average price of SHFE tin in the first half of the year was approximately 396,000 RMB, meaning current prices have basically returned to the average level of the first half of the year.

The primary driver of the decline lies at the macroeconomic level. According to SMM’s analysis, tensions related to Iran drove WTI crude oil up 5.5% to above $93 per barrel, while Brent crude broke through $100 per barrel; the Federal Reserve’s September meeting minutes indicated potential further rate hikes this year, with markets expecting cumulative hikes of 25 basis points before December; the US Dollar Index strengthened to the 102 range, and the US 10-year Treasury yield rose to 5.20%. Against this macroeconomic backdrop, base metals faced general pressure. As a small-cap commodity with strong financial attributes and relatively concentrated positions, tin experienced more volatile fluctuations.

Demand side also failed to provide a clear directional signal. The primary use of tin is in electronic soldering; China’s integrated circuit production reached approximately 127.16 billion units in the first quarter of this year, a year-on-year increase of 34.26%, indicating robust semiconductor sector activity; however, the operating rate of solder enterprises in September was approximately 79.1%, and downstream acceptance of high-priced tin post-holiday requires observation. Regarding tinplate, March production was approximately 110,000 tons, flat month-on-month, while exports declined approximately 16% month-on-month. The moderate nature of demand meant that supply contraction alone was insufficient to drive price increases.

Notably, the divergence between fundamentals and prices is also reflected in inventory levels. LME tin inventories stood at approximately 4,310 tons, at multi-year lows, maintaining a spot premium structure; domestic social inventories dropped significantly ahead of the holiday, rising only slightly in the first week after the holiday. Low inventories indicate that the physical market is not loose, which is also the reason why tin prices were able to rebound quickly despite macroeconomic shocks.

06 Assessment

Maintenance Provides Floor, Macro Determines Direction

Mine Cube’s assessment is that Yunxin’s maintenance brings a phased contraction in domestic refined tin supply in October, providing a bottom support for tin prices; however, the direction of tin prices depends more on the macroeconomic environment and the pace of resumption in Myanmar, and the maintenance itself is insufficient to reverse the trend.

First, the impact of maintenance on supply is phased. Maintenance will end no later than mid-November, and production will gradually recover after resuming operations; the company also stated that its annual plan is not significantly affected. Therefore, maintenance will only alter the supply rhythm from October to early November, without changing the total annual supply volume. The market had anticipated this in advance, which is one reason why the maintenance announcement failed to drive price increases.

Second, profit challenges at the smelting stage will limit supply elasticity. Smelters purchasing external ores face costs exceeding 420,000 RMB, while prices have fallen to near 390,000 RMB, and treatment charges are at low levels, with Jiangxi operating rates dropping to approximately 32%. This means that even if prices fall, smelters are unlikely to increase production to fill the supply gap, and may instead reduce output further. This provides a support zone for tin prices determined by cost.

From an enterprise perspective, scheduling maintenance during periods of falling prices and low treatment charges has certain operational rationality. Yunxin possesses its own mining resources and relies less on purchased tin concentrates compared to most smelters, suffering relatively smaller profit impacts under current treatment charge levels; conducting maintenance when prices are weak and profits from purchased ores are meager carries a lower opportunity cost. This also implies that after maintenance ends, if prices remain low, some smelters with high proportions of purchased ores may continue to maintain low operating rates.

Third, macro factors are the largest short-term variable. Expectations of Federal Reserve rate hikes, rising US Treasury yields, and a strengthening US dollar constitute pressure on all base metals. Given tin’s small market size and strong financial attributes, it reacts more intensely to macroeconomic changes. As long as macroeconomic pressure persists, tin prices will find it difficult to break out into independent trends based solely on supply disruptions.

Fourth, Myanmar represents the most significant medium-term variable. The postponement of full production resumption in Wa State until 2027 implies that raw material supply will remain tight in the coming months. However, once the rainy season ends and issues regarding blasting materials are alleviated, the pace of resumption may accelerate, thereby significantly easing raw material constraints. Mining Cube has previously cautioned that the actual progress of production resumption in Wa State often diverges from official statements; therefore, reliance should be placed on actual data of tin imports from Myanmar into China.

07 Outlook

Focus on Three Key Items Next

Tracking Point 1: Domestic refined tin production data for October. October’s production figures will directly reveal the actual impact of Yunnan Tin’s maintenance. If month-on-month production declines significantly, it indicates that the supply shock from the maintenance exceeded expectations; if the decline is limited, it suggests that prior production arrangements have already absorbed most of the impact.

Tracking Point 2: Imports of tin concentrates from Myanmar and production resumption in Wa State. The volume of tin concentrate imported from Myanmar in September and October, along with the progress of resumption in Wa State after the rainy season, are critical indicators for assessing tightness in raw material supply. If import volumes rebound to above 2,000 metric tons of tin metal per month, raw material constraints will ease significantly.

Tracking Point 3: Federal Reserve decisions and macroeconomic risk appetite. The outcomes of the Federal Reserve’s interest rate meetings in October and December, as well as trends in U.S. Treasury yields and the U.S. Dollar Index, will determine the overall risk appetite for base metals. Only after macroeconomic pressures subside can tin’s low inventory levels and supply contraction re-emerge as the dominant factors influencing prices.

For the tin industry chain, Yunnan Tin’s maintenance serves as a clear signal of supply disruption, but not a decisive signal for price direction. During periods where macroeconomic factors and fundamental dynamics pull in opposite directions, low inventories and high costs provide support rather than driving a trend.

Maintenance provides a floor; direction depends on macroeconomics.

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