Well-grounded Chinese Tin Industry has boarded the fast train of transformation and upgrading
Yang Yimin Vice President of Yunnan Tin Group (Holding) Company Limited General Manager of Yunnan Tin Company Limited
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03 01 China Tin Market Performance in 2017 1. China Tin Market Performance in 2017
2. Narrowed trade deficit for tin products
1. Improved economic results 3. Consumption structure for the overall tin industry: remained stable, with rapidly growing niche More production & better price consumption market Adequate supply & strong demand 1. China Tin Market Performance in 2017
1. Improved economic results with increased production & better price, as well as strong supply & demand
2017 Chinese refined tin: SHFE Base Metals Price Indexes March 2015 – March 2018 1. Production: 175kt, 6.1% year-on-year (YOY) growth; 1.9
2. Consumption: 161.7kt, 2.5% YOY growth. 1.4 2017 total profit of Chinese tin industry: ￥760 million (2016: deficit ￥965 million) 0.9 1. Combined profit of mining and processing sectors:
￥1.4 billion, 82.76% YOY growth 0.4
2. Combined deficit of all smelters: ￥640 million (very
2015-08 2015-02 2015-05 2015-11 2016-02 2016-05 2016-08 2016-11 2017-02 2017-05 2017-08 2017-11 2018-02 much improved compared to 2016 deficit of ￥1.735 billion) Cu Al Zn Pd Ni Sn 1. China Tin Market Performance in 2017
2. Narrowed Trade Deficit Chinese tin Supply/Demand and trade,2016-2017 (kt)
Refined tin & tin alloy: 200
Import: 3957t ( 6131t reduction YOY) 180
Export: 2181t ( 1446t increase YOY) 160
140 Tin Profiles: 120 Import: 5646t ( 562t increase YOY) 100 Export: 5677t ( 263t increase YOY) 80
60
40
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0 Refined Tin Refined Tin Tin Product Tin Product Tin Concentrate Production Consumption Import Export Import 2016 2017 1. China Tin Market Performance in 2017
Chinese Tin Consumption Structure, 2017
Lead-acid Battery Other 12.6kt ( 10% ) 9% 3.38% YOY growth 3. Consumption structure remained stable Tinplate 6.2kt ( 7% ) Solder 3.56% YOY 54.2kt (61%) Steady tin consumption in China as reduction 2.15% YOY growth the result of transformation and upgrading of Chinese manufacturing Chemicals industry and continuous growth in 20.3kt (13%) new materials and tin niche market 2.68% YOY sectors. reduction
1. China Tin Market Performance in 2017
Chinese niche tin consumption grew rapidly in 2017 Solar battery production increased 30.6%; LED chips output gained a growth rate of 30%; Automotive electronics market size increased by 16.1%; New installation for China’s PV generation was 3. Fast-grown niche tin 53.06GW, new record with a 53.62% YOY increase; consumption market IoT industry scale broke through ￥930 billion,
Conservative estimate at increased 9.31%; and > 20% annual increase rate AI industry reached a growth rate of 51.2%, with a production value of ￥15.21 billion.
Continuous mild global economic and trade recovery, as well as moderate easing of monetary policy;
Summary Supply-side structural reform’s benefits and tin industry in a inventory replenishment cycle; Chinese tin industry benefits More regulated and mature Chinese tin futures market and from: investors preference driving up tin price;
Weakening of US dollar index, in favor of commodity price; and
Tin inventory historically low outside China with short tin supply providing support for tin price. 02 China Tin Market Outlook 2018 2. China Tin Market Outlook 2018
Influential Factors of China Tin Market in 2018
Increased overseas demand Improved trade deficit China’s manufacturing industry relocation brings Supply shortage Abolishment of export tariff & overseas demand growth; of tin concentrate quotas on refined tin will Demand potential from USA, Japan, EU & continue benefiting the industry emerging economies remains.
2018 global refined tin consumption forecast: 357.2 kt, with a 3.2% YOY growth. Major growth regions are: • Asia: 2.2%, • Europe: 10.3%, • North America: 5.1%; • Africa & Australia: 2.3% Europe, China, Japan and Advancement of supply-side Revision of Mining Laws America have the greatest reform and EP policies by Many Jurisdictions increase, with strong growth Mining regulations changes affect potential from Asian emerging economies. future global metal price 2. China Tin Market Outlook 2018
The world economy maintains a moderate growth: • U.S. tax reform and infrastructure policy will stimulate Global investment; Accordingg to Chinese Economy • European economy moves into fully recovery; Government’s “Report on the • Japanese economy continues to expand for 7 quarters. Work of the Government”, dated March 5, 2018:
• Chinese 2018 GDP: target at 6.5%; Industry Steady growth of Chinese economy： • M2 and social finance at Chinese same growth rates as 2017, Background • Transit from ‘speed’ to ‘quality’; Economy • Increased stability, coordination & sustainability. i.e. 8% & 12% respectively; • Budget deficit rate target down to 2.6% from 3%; • Tax and import tariffs will be reduced (cars and some daily Chinese market will remain the main driving force of the necessity). Nonferrous world’s nonferrous metal production and consumption. Industry • World nonferrous metal price predicated to fluctuate; • However, strategic material prices for emerging industry, such as cobalt, lithium, tin and other rare metals, will remain strong. 2. China Tin Market Outlook 2018
Supply: Reduction
China Tin Mining: Tin Concentrate Import: Recovery Significant Decline • All producing mines are processing feed with much reduced grades; Under pressure of EP in 2017, • No new tin resource discovery; Chinese tin mines are in the Prediction for 2018: • Rely on recovery of low grade ore process of improving mining to sustain production; techniques and mining conditions; Tin concentrate shortage; • Significant decline in ore production. Tin ore production in regions such Tin in short supply • Improved processing technology as Inner-Mongolia, Jiangxi, Hunan enable the re-treatment of historical & Gejiu will increase, compared to tailing material as extra feed. that in 2017. • Most tin mines in a destocking mode. 2. China Tin Market Outlook 2018
Consumption: Slight Increase
Small Growth Resume to Grow Sustained development of China 2017 saw demand reduction in tin electronic information manufacturing chemicals
Solder chemicals, due to: industry. • Chinese government’s increased Electronics, automobiles, new energy environmental regulation; automobiles and new sectors • Shutdown or relocation of small and (including LED, photovoltaic cell, medium enterprises in China;
electric bike, electric car, vehicle • Increased international competition electronics, AI and IoT) will maintain and trade regulation. rapid growth, leading to increased tin But after rectification, chemicals sector
consumption. will have greater demand in 2018. LA Battery LA
tinplate Growth Slowdown Continue to Fall Optimistic growth forecasted, although: • consumption close to saturation after Tinplates sector faces competition fast expansion, and
from substitute products such as • Potential replacement by lithium
battery.
aluminum plate, tin-free steel, clad steel, PET plastics, tetra pack and Rapid growth areas include hybrid electric glass, etc. vehicle, telecom systems & alternative energy electronic storage. 2. China Tin Market Outlook 2018
China’s Tin Consumption in 2018: Small Increase
China Tin Consumption, 2009-2020 (kt) 1. China’s tin demand growth may slow 190 down, due to
170 • industrial transform from low-end to high-end; and 150 • The Belt and Road Initiative will 130 shift some ordinary industries to 110 overseas.
90 However, rapid growth is predicated in Vietnam, Malaysia, India and Africa 70 countries. 50 2. ‘Abolishment of export tariff and quotas 30 on refined tin’ and ‘Tin concentrate
10 processing trade permit’ will continue to 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018E 2019E 2020E facilitate market circulation, and provide balance between domestic and overseas markets.
2. China Tin Market Outlook 2018
Proportion of trade volume of B&R participating countries with China in China’s total import and export volume, 2011-2017
29% In mid-and-long term, 28.05% 28% 27.80% China's tin consumption 27.20% 27% 26.90% still has growth potential. 26.63% 26% 26.10% 25.80% 25.70% 25.20% 25.20% 25.30% Sustained recovery of the 25% 25.00% 24.80% 24.70% 24.88% 24.60% 24.50% global economy 24.20% 24% 23.90% ‘The Belt and Road Initiative’ 23% 23.10% 23.00%
22% Beijing-Tianjin-Hebei 2011 2012 2013 2014 2015 2016 2017 collaborative development Import and export Import Export Yangtze River Economic Belt In 2017, the trade volume with the Belt and Road (B&R) participating countries reached 7.4 construction trillion RMB, an increase of 17.8% YOY. Exports 4.3 trillion RMB (12.1% increase YOY) and imports 3.1 trillion RMB (26.8% increase YOY). Direct investment was US$14.4 billion and "Made in China 2025" the amount of newly contracted project was US$144.3 billion with a growth of 14.5%. In February 2018, China’s export increased by 44.5% YOY, significantly higher than 11% predicated. From January to February 2018, combined YOY increase is 24.4%, due mainly to export increase to B&R participating countries and BRIC countries. Export to SE Asia increased by 27.7%, and exports to Russia, Brazil, India and Indonesia greater than 30%. 2. China Tin Market Outlook 2018
China's Annual New Investment (100 million RMB), 2010-2017
Tin Real Estate Demand Year 2010 2011 2012 2013 2014 2015 2016 2017 Sustained Amount 14506 18000 16976 18784 12266 2985 8609 7218 by:
Infrastructure Construction investment on real 点击添加内容文字 Year 2010 2011 2012 2013 2014 2015 2016 2017 estate点击添加内容文字, infrastructure construction Amount 10113 2137 10226 16450 18553 19091 20746 21074 & rapid development of EI industry electronic Year 2010 2011 2012 2013 2014 2015 2016 2017 information industry Amount 1265 1370 678 1224 791 1084 2176 4036 2. China Tin Market Outlook 2018
In 2018, tin price is expected China Tin Price Chart, 2009-2020 to stay high & volatile
200,000 SHFE tin average price is estimated at 146000 RMB/ton, trading range: 180,000 135000-165000 RMB/ton SMM tin average price is estimated 160,000 at 145500 RMB/ton, trading range: 134000-163000 RMB/ton 140,000 LME 3-month tin average price is estimated at $21000/ton, trading 120,000 range: $18500-$22500 / ton In the medium term, tin price remains strong. 100,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
SMM SHFE 03 Future of Chinese Tin Industry 3. Future of Chinese Tin Market
China plays a pivotal role in the global tin industry, as the Increasing shortage of tin supply Very few new tin deposit discoveries. world’s largest tin producer and Tin mining is limited in the current geographic areas. consumer.
Significant progress has been Multiple challenges: EP impact; new techniques & equipment EP pressure and rising cost achieved in recent years, such Required; and price rises of material and labor as mining equipment, technology, increased scale Undersupply outside China From 2015 to 2017, tin is in short supply for the market outside production, as well as VS China; while oversupplied in Chinese domestic market. oversupply in Chinese domestic market In 2017, market outside China was short of 7,500 ton tin; and development strategy. Chinese market had a surplus of 13,300 ton.
However, China's tin industry also faces threats and Risk of tightening money supply & Tightening US and EU monetary policies, appreciation of RMB, economic fundamentals weakening with a downside risk of global economic recovery. challenges originated from within China and outside. 3. Future of Chinese Tin Market 1 2 3 4 5
Green Win-win Internationali- Integration of Development Innovation-driven Cooperation sation Industry & Finance
• Supply-side Reform • Industry chain • Go-global Strategy • Improving the financing • Talents For Strong • 19th CPC NC – Green data cooperation • The Belt and Road capacity of enterprises Enterprise • Co-op with service • Talents for Strong • Green Development enterprises Country • Cleaner production • Talents • industrial structure • Expand to cover • Technology • Financial products and optimization vertical processing • Management services innovation for • Technology progress sectors • Improve the world tin industry • Talents cultivation • Improving resources • Establish industrial position of Chinese tin • Mitigating price risk • industry-university- utilization efficiency strategic alliance industry by using options & research cooperation • Leverage enterprise futures resources • Enhance competitiveness
• On a ‘green’ path • On a ‘strategic • On an • On the path of • On an ‘Innovation- cooperation’ path ‘internationalization’ ‘integration of driven’ path path industrial-finance’
Thank you!
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