On May 11, 2026, the Peruvian government issued Emergency Decree No. 003-2026 in response to an energy crisis, triggering widespread market concerns over non-ferrous metal supply. However, through an in-depth analysis of the underlying energy consumption structure of the tin industry and Peru's domestic supply landscape, we believe this decree will have negligible actual impact on global tin ingot supply. The market's current anxiety stems more from supply concerns. This article aims to strip away macro noise and restore the true operational logic of the tin industry. I. The Nature of the Energy Crisis and Its Relevance to Tin Smelting The core of this Peruvian crisis is a "gas shortage" triggered by a natural gas pipeline rupture, which could potentially lead to power shortages. The logical basis for market concerns about mining sector damage lies in "high energy consumption." However, from the perspective of tin's physicochemical properties and smelting processes, tin is not a high energy-consuming metal: Short process flow: Tin smelting primarily employs Ausmelt and similar smelting processes to reduce tin concentrates into crude tin. Although this process requires high temperatures, the electricity consumption per mt of tin is far lower than that of aluminum or blister copper smelting. Low share in cost structure: In the production cost of tin ingots, raw materials (tin concentrates) typically account for over 80%, while energy (electricity, heavy oil/coal) costs represent an extremely low proportion. Even in the face of power rationing or short-term price increases, the marginal impact on the comprehensive production cost of tin ingots is almost negligible. II. Peru's Domestic Tin Industry Landscape: Peru's sole tin producer and the world's second-largest tin company — Minsur: Proprietary clean energy advantage: Minsur's San Rafael mine and Pisco smelter rely heavily on proprietary hydropower stations in the Peruvian Andes for their electricity supply. Peru's natural gas crisis primarily affects industries and residential users dependent on natural gas, with limited impact on mining areas powered mainly by hydropower. Volume: In 2025, Peru's tin concentrates production was approximately 33,800 mt, accounting for around 10% of global total production. Policy orientation: The government's emergency decree primarily focuses on safeguarding the nation's energy lifeline (such as Petroperú's operations), rather than directly intervening in the supply-demand balance of metals. III. Where Is the Real "Pain Point" in Global Tin Supply? Rather than focusing on Peru's natural gas pipeline, attention should be directed toward the true bottlenecks constraining global tin supply: Myanmar Wa State production halt: Production resumptions in the Wa State region have been slow, and Myanmar's rainy season is approaching. Indonesia's seasonal disruptions:Indonesia's rainy season and RKAB (mining and production quota) policies cause periodic disruptions to global tin ingot exports every year. These are the core variables that will determine future tin price trends. Peru's energy crisis plays a negligible role among them. IV. Conclusions and Investment Recommendations Based on the above analysis, we conclude that Peru's energy crisis legislation has negligible actual impact on tin ingot supply, and current concerns represent an overreaction by the market. Supply side:Peru's tin ingot supply will remain highly stable. The global tin ingot supply bottleneck remains in Myanmar, Indonesia, and other regions, not in Peru's natural gas pipeline. Price side:Tin prices will not experience fundamentally driven increases due to Peru's energy crisis. Short-term tin price fluctuations are more likely driven by macro sentiment, rallies in other metals (such as copper and silver), or sentiment-driven speculation by capital exploiting the "Peru crisis" narrative. Strategy recommendation: Investors are advised to strip away the noise from Peru's energy crisis when monitoring tin price trends and return to fundamentals. Key focus should be on expectations for production resumptions in Myanmar's Wa State, Indonesia's export policies, and marginal changes in downstream electronic solder demand.

[SMM Analysis: Stripping Away Macro Noise: Analysis of the Substantive Impact of Peru's Emergency Decree on Tin Supply]

Minsur, the world's second-largest refined tin producer, reported that its Pisco smelter in Peru produced 8,314 mt of refined tin in Q1 2026, down 2.9% YoY. The company attributed the slight decline in tin production to lower feed grades and reduced recovery rates at the smelter. Meanwhile, rising tin prices drove a 16.9% YoY increase in net revenue, effectively offsetting the impact of the production decline. Tin-in-concentrates production from the San Rafael underground mine fell 2.0% YoY to 6,096 mt due to lower recovery rates, but this was partially offset by a 3.3% increase in production from the B2 tailings dam. Total tin-in-concentrates production was basically flat YoY at 7,993 mt. The mill feed grade at the San Rafael mine remained stable at 2.40% Sn.

Allianz Global Investors (AllianzGI) has agreed to acquire an indirect stake in German grid operator Amprion from insurer Talanx, with the deal expected to close in Q2 2026. As part of the partnership, both firms plan to invest significantly in Germany’s power grid. Amprion, which operates over 11,000 km of extra-high-voltage lines, aims to spend €36.4 billion by 2029 to build or upgrade 9,300 km of network to support rising energy demands.

Philippines Market: Tight Supply and Surging Freight Rates Supported Ore Prices to Fluctuate at Highs Philippine nickel ore prices rose sharply this week. In terms of prices, Philippine nickel ore CIF China quotes were $64-68/wmt for Ni 1.3% grade, $71-75/wmt for Ni 1.4% grade, and $78-82/wmt for Ni 1.5% grade, up $6 WoW. The average CIF price from the Philippines to Indonesia was $65.5/wmt for 1.3% grade and $72.5/wmt for 1.4% grade. Supply side, although the Philippines was transitioning into the dry season, mining hubs such as Surigao and Homonhon continued to see heavy rainfall due to a low-pressure area (LPA) east of Mindanao. Although Metro Manila and most parts of Luzon saw hot and sunny weather, the probability of rainfall exceeding 50 mm in Surigao and Caraga remained “very high.” Strong thunderstorms and scattered precipitation were expected to further intensify during March 9 to 13. Affected by the trough of the low-pressure area and the easterlies, persistent rainfall may continue to disrupt open-pit mining and vessel loading operations in southern regions. Market supply remained scarce. Driven by both supply tightness caused by cuts in Indonesia’s RKAB quotas and expected supply gaps, mainstream prices for Philippine nickel ore have surged recently. As of Friday, March 13, nickel ore inventory at Chinese ports stood at 5.23 million mt, down 500,000 mt WoW. Current total port inventory was equivalent to about 41,100 mt Ni in metal content. Demand side, China’s NPI prices rose this week, with spot transaction prices up about 1,089.9 yuan per nickel unit. As smelters had sufficient stockpiling earlier and showed limited acceptance of recently high-priced nickel ore, most were currently taking a wait-and-see stance. In terms of ocean freight rates, affected by a sharp jump in oil prices, nickel ore freight rates climbed, with the ocean freight rate from the Philippines to Lianyungang reaching $15/mt or above. Looking ahead, Philippine nickel ore prices are expected to continue fluctuating at highs. Indonesia Market: Under Weather Disruptions and RKAB Policy Clarification, Tight Supply Continued Indonesia's local nickel ore prices rose somewhat this week. Indonesia’s nickel ore benchmark price (HPM) for the first half of March was set at $17,104/dmt, down 3.21% MoM. According to SMM Indonesia nickel ore premium data, average premiums for 1.4%, 1.5%, and 1.6% grade laterite nickel ore were reported at $35, $39, and $39.5/wmt, respectively. Among them, the port arrivals under domestic trade price for 1.6% grade was $65.2-74.2/wmt. The simultaneous strengthening in premiums this month reflected both the release of smelters’ restocking demand and pessimistic expectations over RKAB quota cuts, while the delivered price of 1.2% grade limonite ore also edged up to $24-26/wmt. From the supply and demand fundamentals, as of March 13, Indonesia’s key nickel ore producing areas of Morowali, Konawe, and Halmahera were affected this week by strong thunderstorms and extremely high humidity of up to 94%. Weather continued to fluctuate, causing soil to become highly saturated and seriously hindering mine drying and transport operations. Morowali and Konawe will face a heavy rainfall system over the weekend with precipitation probability as high as 80%, while Halmahera, under high-humidity conditions, is expected to see rainfall intensity rebound again next Friday, with overall logistics capacity remaining constrained. At present, RKAB approvals for most small- and medium-sized mines remained pending. As existing quotas could no longer be used for next month’s production and sales, rising supply uncertainty was pushing nickel ore prices higher. Demand side, as some Indonesian smelters faced uncertainty over nickel ore resources and found it difficult to secure high-grade saprolite ore, nickel ore prices remained firm. To secure raw material supply, some smelters even raised trading bonuses. Overall, although the impact of the current MOMS system failure on mines had largely faded, overall nickel ore supply remained tight. Although spot supply of limonite ore was relatively sufficient, some related production lines were currently running at low load due to a tailings dam landslide accident at some MHP projects in an Indonesian industrial park, leading to temporary weakness in overall demand. However, considering concerns among some Indonesian smelters over RKAB approval uncertainty, raw material stockpiling demand from newly commissioned projects, and continued growth in demand from outer islands, limonite ore prices are expected to closely track saprolite ore and remain high. On the policy side, in response to recent market rumors that “production quotas (RKAB) will be uniformly supplemented by an additional 25%-30%,” Tri Winarno, Director General of Minerals and Coal at Indonesia’s Ministry of Energy and Mineral Resources (ESDM), clarified on March 3, 2026, that RKAB supplements would be based on individual assessments of enterprise production capacity and compliance, rather than a uniform proportional increase, and indicated that the approval process would start in H2 2026. Officials emphasized that this was a routine regulatory process for resource optimization, rather than a passive countermeasure to the previous output cap policy. Looking ahead, affected by the relatively slow progress of RKAB approvals, nickel ore prices are expected to remain more likely to rise than fall in April.

Recent Middle East conflicts have disrupted the region's booming energy storage market, a major destination for Chinese exports. To assess the real impact on Chinese supply chains and project deliveries, we must analyze baseline demand amidst these geopolitical uncertainties.