China’s nine major tin producers, including the world’s largest supplier Yunnan Tin Company, announced today that they would reduce their combined production by some 17,000 tonnes or 12% year-on-year in 2016 in response to adverse market conditions. The industry in China has been negatively impacted by continuously declining prices through 2015, as evidenced by reported financial losses and the significant production cuts already made in the last six months.
The output of the nine participating producers (YTC, China Tin, Chengfeng, Zili, Kaimeng, Yunxin, Jinye, Nanshan and Weitai) amounted to around 140,000 tons in 2015. This is equivalent to more than 80% of China’s domestic production of refined tin and some 40% of the world total.
The announcement, made via Bloomberg, followed a market seminar in Kunming on 14 January. At this meeting the current market situation was discussed in depth, and the participants reached a consensus on the need for production controls in order to get out of current difficulties and ensure the healthy development of the industry. It was decided after discussion that a communication mechanism should be established among domestic tin producers which would focus on making timely adjustments to production in response to market conditions and the phasing out of some old and backward facilities, thereby generally raising industry production standards.
According the Bloomberg, the smelters also said in the statement that “the market is detached from fundamentals” and called upon the China government to buy tin for reserves in a pro-active way.
Source: ITRI – www.itri.co.uk