US Fed holds rates steady for fifth consecutive time, SHFE tin 2609 contract returns to 418,000 [SMM Tin Morning Update]

Futures

LME : LME three-month tin closed at $53,850/mt on July 29, up $445/mt, or 0.83% , recovering from the shadow of the previous session’s 1.72% decline, as renewed escalation of Middle East tensions heightened concerns over Gulf supply chain disruptions. LME tin inventory fell by 80 mt to 6,330 mt, continuing destocking , with cancelled warrants at high levels, the ex-China price-holding structure remained intact.

China (July 29 daytime session) : the most-traded SHFE tin SN2609 contract closed at 417,020 yuan/mt, up 0.53% , showing strong performance during the daytime session. Opening reference for the July 30 morning session: SN2609 is expected to open at 417,000–420,000 yuan/mt . Above the 415,000 mark (the July 10 high) is a new battleground for longs and shorts, and the round number mark of 400,000 has shifted from a "support test level" to a "strong support zone" .

Macro
(1) The US Fed held rates at 3.5%–3.75% on July 29, but revealed the strongest hawkish dissent since 2016. The FOMC kept rates steady for the fifth straight meeting by a 9-to-3 vote, with three regional Fed presidents—Logan of Dallas, Kashkari of Minneapolis, and Hammack of Cleveland—dissenting in favor of a 25 bp hike, marking the first time since 2016 that three votes dissented in the same direction. Chair Warsh reiterated "zero tolerance for persistently high inflation," and the statement text was only 115 words, the shortest in nearly 20 years. CME FedWatch: The probability of at least one 25 bp rate hike by January 2027 stands at 90%, while the chance of at least two 25 bp hikes by December is about 58%. While the "no change" outcome materialized as a short-term positive, the rate hike path for the year has steepened significantly, posing medium-term pressure on the zero-yield nature of nonferrous metals.
(2) The US–Iran conflict escalated further, with geopolitical premium pushing up oil prices. Iran launched ballistic missiles at a U.S. military base in the Middle East, breaking the ceasefire. Crude oil surged, and the chain of "energy inflation → interest rates" tightened again, resonating with the FOMC’s hawkish divergence. The Middle East turbulence was the key external factor behind LME tin’s V-shaped rebound of 0.83% on July 29.
(3) U.S. stocks tumbled in late trading, with tech stocks showing divergence. After the Fed decision, all three major U.S. indices plunged: the Dow fell 2.19%, the S&P 500 fell 1.52%, and the Nasdaq fell 1.74%. However, the A-share storage sector was active, buoyed by the post-IPO momentum of ChangXin Memory Technologies (CXMT). The AI computing power chain’s ‘solder alpha’ support for tin remained intact, and SHFE tin demonstrated strong resilience.
Fundamentals
(1) Supply: The pattern of tight ore supply and limited ingot availability remained unchanged, and production resumptions in Myanmar’s Wa State continued to fall short of expectations. Myanmar’s Wa State recorded actual monthly production of around 1,200 mt Sn, while the production resumption level at the Man Maw tin mine was only 40%-50% of the pre-ban level. Myanmar is expected to achieve a full production resumption only in 2027. From January to June, tin concentrates imports from Myanmar totaled 13,200 mt, down 75.96% YoY.
Indonesia’s refined tin exports in June were 2,995 mt (up 5.09% MoM, down 32.55% YoY). The annual RKAB quota was only 55,000-60,000 mt, and controls over export taxes and fees continued to tighten.
(2) Demand: High prices suppressed transactions, with the off-season and fear of high prices exerting a dual drag. Downstream players were cautious and on the sidelines due to elevated prices, with limited willingness to proactively restock, and spot cargo transactions turned weaker. Demand for high-purity tin from AI servers and advanced packaging continued to be released, but in the short term, high prices made solder producers and clients in home appliances and PV more cautious in placing orders. Stockpiling for new Apple/Huawei model launches in late August will be the next demand trigger point.

Spot market transactions: relatively weak. After a sharp rise in spot prices, downstream players stayed on the sidelines due to fear of high prices. Meanwhile, traders’ sentiment to hold back from selling strengthened, alongside downstream restocking at lower prices to a moderate extent. Market transactions recovered somewhat, but overall remained average. Brand premium differentiation continued: minor brands +500 to +900, Yunzi +900 to +1,200, and Yunnan Tin +1,200 to +1,500, with the premium structure staying firm.

[Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and SMM’s internal database models, and are for reference only and do not constitute decision-making advice. The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and should not use this as a replacement for independent judgment. Any decisions made by clients are unrelated to SMM.]