Macro Sentiment Shift Coupled with Rational Correction, the Most-Traded SHFE Tin Contract Quickly Hits Down Limit in Morning Session [SMM Tin Midday Review]

On February 2, the most-traded SHFE tin sn2603 contract quickly hit the daily limit down after opening, closing at 392,650 yuan/mt, with a decline of -11%. In the overseas market, LME three-month tin continued to weaken, temporarily quoted at $47,700/mt, down 5.73%. After a period of continuous gains, the futures prices pulled back rapidly as macro sentiment cooled and funds took profits.

On the macro front, on January 30, US President Trump nominated Kevin Warsh to succeed Jerome Powell, whose term ends in May, as the next Fed Chairman. Previously, the market generally expected a continuation of a loose monetary environment globally, or even a risk of monetary order loosening. The nomination of Kevin Warsh led to a reversal of market expectations. Coupled with the previous significant rallies, the market has now entered an adjustment phase, with bulls liquidating positions and leaving the market, putting overall pressure on the commodities market, leading to a price collapse.

Fundamentally, in January, production at most smelters remained stable, but demand from downstream enterprises was limited due to high price pressures. On Friday, when the futures prices declined, market transactions were active, but some still held a wait-and-see attitude. Today's limit-down session continued to send weak signals, and some downstream enterprises, under the prolonged high-price tension, released part of their inventory management needs.

Overall, the support from macro sentiment is gradually weakening. Going forward, it is necessary to continuously monitor the ongoing impact of macro events and the overseas supply situation. It is expected that in the short term, tin prices will remain in the doldrums.