Small and medium-sized smelters in Gejiu, China, could suspend their refining processes due to environmental checks. This round of environmental inspections is set to begin in early April. Starting in Honghe prefecture, the checks could last around one month.
In addition to this, some smelters in Guangxi, Anhui, and Inner Mongolia have already ceased production.
However, these stoppages have not been for environmental checks; equipment maintenance and insufficient supply of raw materials have all been quoted as reasons. Raw materials supply has come under pressure in recent months due to heavier-than-normal seasonal rains in Myanmar, border closures, and now the environmental inspections.
With Chinese treatment charges low to incentivise supply, some smelters are reportedly operating at significantly reduced margins.
In Gejiu alone, environmental inspections could impact around 1,200 tonnes of refined tin production over the likely 10 day period. Other closures could total around 1,000 tonnes if production stoppages only last for half a month as expected.
This is unlikely to be a significant issue for the Chinese tin market. The Shanghai Futures Exchange tin stockpile currently exceeds 8,000 tonnes of refined tin – some of this is likely to be absorbed by the market to replace lost production during this period.