Shanghai tin futures extended gains into the early morning session of August 21, with the most-traded September 2609 contract closing at 428,230 yuan/mt, up 3,180 yuan or 0.75% from the previous session, according to Shanghai Metals Market (SMM) reporting. The night session opened at 424,000 yuan/mt and rallied throughout the session to reach an intraday high of 429,580 yuan/mt, marking the second consecutive day of gains and establishing 428,000 as a new pivot level after serving as resistance. On the London Metal Exchange, three-month tin futures closed on August 20 at $55,803/mt, up $253 or 1.11%, and continued higher on the morning of August 21 at $55,850/mt, up 0.54%.
Tin led gains among London base metals, with zinc up 1.07%, lead up 0.64%, and copper down 0.06%, while nickel and aluminum declined. LME tin inventory decreased by 130 mt on August 20, remaining at historically extremely low levels. Market analysts attribute the rally to dovish macroeconomic signals.
US July inflation data showed CPI year-over-year at 3.4%, the lowest since March, while core CPI reached 2.5%. Producer prices declined significantly with PPI year-over-year at 4.7% compared to 5.5% previously, and retail sales fell 0.6% month-over-month in July, marking the largest monthly drop in over a year. Based on CME FedWatch data, the probability of no change in September Federal Reserve policy stands at 63.8%, with a 36.2% probability of a 25-basis-point rate hike.
This dovish sentiment has bolstered demand for base metals including tin. Two significant economic events are scheduled to influence market direction in the coming week. The Federal Reserve's preferred inflation gauge, the July Personal Consumption Expenditures price index, will be released on August 26 at 12:30 p.m.
Eastern Time. Oxford Economics estimates headline PCE year-over-year at 3.6% compared to 3.7% in June, while the Cleveland Fed Nowcast and SinoPac estimate core PCE year-over-year at 3.3% to 3.4%. Goldman Sachs cautions that disinflation progress may stall, with energy prices potentially pushing up headline readings.
Additionally, Federal Reserve Chair Warsh is scheduled to deliver a keynote speech at Jackson Hole on August 28 at 10:00 a.m. Eastern Time, approximately 18 to 19 days before the September 15-16 Federal Open Market Committee meeting. On the supply side, constraint factors remain intact.
Yinnan Mining, a core tin-silver producer with annual mining and processing capacity of 1.65 million metric tons, announced on July 31 that mining, processing, and tailings operations have been fully shut following a July 26 accident. The duration of the shutdown cannot be determined as investigations continue. A short suspension of one to two months is estimated to reduce tin metal content by approximately 1,000 mt.
Myanmar's Wa State production remains capped at 40 to 50 percent of pre-mining ban levels, with full resumption postponed to 2027 according to International Tin Association estimates. Myanmar's monthly tin ore exports to China returned to over 6,000 mt in July but remain significantly below normal levels. In the spot market on August 20, downstream end-users and solder plants inquired and priced tin in the 424,000 to 426,000 yuan/mt range, with stronger willingness than earlier price levels.
Premium brand tin ranged from parity to 1,500 yuan/mt over the September futures contract. However, above 428,000 yuan/mt, solder plants showed generally weak buying willingness. The July solder operating rate declined to 72.8% month-over-month, indicating that electronics industry demand has not yet matched the pace of futures price increases.
Demand from artificial intelligence servers and advanced packaging remained resilient but insufficient to drive significant spot volume increases in the short term. Source: Shanghai Metals Market (SMM) via news.metal.com; data from LME, SHFE, CME FedWatch, and related financial institutions as cited in the original report.
Source: news.metal.com