December 17, 2025 SMM Tin Morning Brief:
Futures: The most-traded SHFE tin contract (SN2601) opened slightly higher in the night session and hovered at highs, closing at 323,220 yuan/mt, up 0.07% from the previous trading day.
Macro: (1) After months of pressure from the auto industry, the EU abandoned an effective ban on internal combustion engines and offered carmakers greater flexibility in the transition to clean transport. This move indicates that the promotion of electric vehicles in Europe will slow down, bringing the region more in line with the US, where President Trump is rolling back automotive fuel efficiency standards set by the previous administration. Under the new proposal, the EU will relax the requirement to ban sales of new petrol and diesel-fueled cars from 2035. By the mid-next decade, tailpipe emissions must be reduced by 90%, compared to the current target of 100%. The European Commission stated on Tuesday that the revision will allow carmakers to continue selling some vehicles equipped with internal combustion engines, as well as plug-in hybrids and extended-range electric vehicles (EREVs). The EU set a condition that automakers must compensate for additional pollution by using low-carbon or renewable fuels, or by using locally produced green steel. (2) Changan Auto stated in a specific object survey that its Deepal car model received approval on December 15 for an intelligent connected vehicle product entry permit equipped with L3 autonomous driving functionality, enabling autonomous driving in single lanes on highways and urban expressways under traffic congestion conditions (maximum speed 50 km/h). Regarding the subsequent commercialization plan for L3, the company expects to conduct pilot road applications with the user entity Changan Che Lian Technology in Q1 2026. After the official release and implementation of relevant national regulations and policies, Changan Auto will begin product entry and market launch for end users. The company has a complete L3 plan, with Avatr, Deepal, and Qiyuan gradually launching corresponding car models. As the scale of L3 expands, it is expected to be available in models priced around 150,000 yuan in the future. (3) OECD Secretary General Cormann stated that the artificial intelligence investment boom driving global economic growth is expected to continue and yield longer-term benefits. The organization raised growth forecasts earlier this month for several major economies, including the US, noting that technology spending has provided support amid trade uncertainties. Cormann said, "We expect investment levels in the AI field to continue growing for some time. In the medium and long term, we anticipate that the accelerated popularization and application of AI in the economy will have a significant positive impact on productivity growth."However, Coleman stated that the OECD expects the global economic growth rate to slow down from 3.2% in 2025 to 2.9% next year, and trade headwinds may intensify. He said, "We do see quite a number of downside risks. The impact of tariffs has not yet fully materialized, trade uncertainty persists, and there is also a range of other structural pressures."
Fundamentals: (1) Supply-side disruptions: Tin ore supply is tightening overall in major producing regions such as Yunnan. In December, most smelters are expected to maintain relatively stable production. (2) Demand side: Due to weak demand in the consumer electronics and home appliance markets, orders have decreased significantly. Downstream purchasing remains cautious, and high prices are significantly suppressing actual consumption. Limited boost from emerging sectors: Although AI computing power improvements and growth in PV installations have driven some tin consumption, their current contribution scale remains small and insufficient to offset the decline in consumption from traditional sectors.
Spot market: Trading in the spot market was relatively active yesterday, as prices once fell below the 320,000 yuan threshold. Some downstream and end-users began scheduling orders and simultaneously purchasing spot tin ingots, with a few enterprises also conducting some restocking. Most traders reported transactions of one truckload or more, while some reported volumes in the range of 2–3 truckloads.
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