BEIJING: Tin prices jumped in Shanghai and London on Thursday after Yunnan Tin, the world's biggest refined tin producer
BEIJING: Tin prices jumped in Shanghai and London on Thursday after Yunnan Tin, the world's biggest refined tin producer, said it was cutting production as part of a joint action by Chinese smelters in response to tight ore supply.
The most traded tin contract on the Shanghai Futures Exchange, for delivery in January 2020, rose as much as 4.8% to 145,090 yuan ($20,455.96) a tonne, its highest since June 19, after Yunnan Tin said its 2019 refined output "will be reduced by about 10% compared with the annual production plan."
The contract was trading at 143,100 yuan, as of 0622 GMT.
Benchmark three-month tin on the London Metal Exchange climbed as much as 3.1% to $17,740 a tonne, the highest since July 26, following Yunnan Tin's filing to the Shenzhen stock exchange, before easing to $17,490.
The filing did not provide a tonnage figure for Yunnan Tin's previous production plan. However, a company official, who asked not to be identified, said it would cut about 7,000 tonnes of annual output and a group of domestic smelters would cut 20,200 tonnes in total.
A Yunnan Tin spokeswoman was unable to confirm the numbers.
Kunming-based Yunnan Tin churned out 77,789 tonnes of refined tin in 2018, according to the International Tin Association (ITA), making it the top producer globally with more than double the output of Indonesia's PT Timah in second place.
Yunnan Chengfeng ranked fourth with 22,900 tonnes, while China's Jiangxi Nanshan Tin and Guangxi China Tin were also in the top 10.
China's imports of tin ore, which is processed into tin metal, in the first half of 2019 decreased by 28% from a year earlier, customs data show, amid a sharp drop in shipments from Myanmar, which borders Yunnan Tin's home province of Yunnan.
The Beijing branch of the ITA said in a note last month that China's domestic tin ore production was also lower year-on-year and that some Chinese smelters were cutting output to avoid losing money because of low tin prices.
Prices were also a factor in the decision to reduce output, the Yunnan Tin official added.
Shanghai tin prices had hit a three-year low of 127,700 yuan a tonne as recently as Aug. 26 amid weak demand in China, the world's top metal consumer.