US Dollar Pullback Hedged against Pre-NFP Rate Hike Pricing, Battle for 430,000 Mark Kicked Off [SMM Tin Morning Note]

Futures

LME: The three-month LME tin electronic trading session on August 4 (Tuesday) closed at $55,800/mt, up $435, or 0.79%, with a high of $55,950 and a low of $55,510. After nickel, zinc, and lead all pulled back, tin hit a new high on its own, continuing to lead the base metals.

China (August 4 daytime session → August 5 night session): SHFE tin 2609 daytime session closed at 429,290 yuan/mt, up 0.74%, with an intraday high of 430,920 and low of 422,500, open interest 60,263 lots, net capital inflow of 530 million yuan during the daytime session.At 01:00 on August 5, the night session for 2609 closed at 430,060 yuan/mt, up 2,690 yuan, or 0.63%, open 431,500, high 432,700, low 428,820, open interest 61,408 lots—the 430,000 integer level has shifted from "resistance above" to a "battleground between bulls and bears."

August 5 morning session opening reference: 2609 opens at 429,500–432,000 yuan/mt. If the morning session holds 430,000, the night session high of 432,700 could be tested again; if it falls back below 428,500, it would represent wild swings at highs as bulls take profits.

Inventory:

• LME tin inventory fell to 5,870 mt on August 4, down 90 mt on the day, with registered warrants at 5,090 mt, cancelled warrants at 780 mt, and a cancellation rate of 13.29%; deliverable supply outside China continues to tighten.

• SHFE tin warrants remain low for this time of year. As of the August 4 night session, open interest for 2609 was 61,408 lots, and total open interest is about 104,000 lots; funds are still betting on the low inventory + ore tightness theme.

Macro: US-Iran de-escalation + US dollar pullback give tin room to rally in the short term, but the 67% probability of a rate hike before the nonfarm payrolls remains

(1) Easing in US-Iran/Hormuz negotiations has pulled back oil prices and inflation premiums.The US Treasury Secretary signaled a possible near-term US-Iran Strait deal, pushing Brent oil lower; the US dollar index fell below 100 to around 99.8.The "geopolitics → oil → inflation → rate hikes" suppressing chain has loosened in the short term, directly driving the collective surge in nonferrous night sessions.

(2) But the probability of a September rate hike still hovers near 67%.CME FedWatch: For September, probability of no change is 32.8%, cumulative 25bp hike probability67.2%; for October, cumulative 50bp hike probability 19.3%. Williams reiterated that if inflation does not return to a 2% path, they will hike decisively, and the Warsh-style hawkish undertone remains.

(3) Intensive employment data releases this week sank the market, determining whether 435,000 is a breakout or a fake breakout :

• JOLTS job openings for Aug 4 were already released (expected 6.948 million, previous 7.594 million);

• tonight, Aug 5, ADP private employment (expected +75,000) and ISM Services PMI ;

• Aug 7, July non-farm payrolls (expected +85,000, unemployment rate 4.3%).

If ADP and non-farm payrolls continuously weaken, the September rate hike probability pulls back to below 50%, and tin, leveraging low inventory, shots up to 435,000–440,000; if data is resilient, the probability moves from 67% to the 80% ceiling, and a retreat after rapid rise is likely above 435,000.

(4) Tech supply chain sentiment recovered, supporting AI solder α. On Aug 4, U.S. tech stocks rebounded, Palantir commercial revenue +149%, AWS "demand far exceeds supply"; on Aug 5, A-share semiconductor and computing power chain were relatively strong—tin's "AI server + advanced packaging" marginal growth (2026 full-chain tin consumption approximately 12,100 mt) again received a sentiment premium in the short term.

Fundamentals: Yinman's full suspension not yet resolved, Wa State slow production resumptions, supply elasticity locked at a low level

(1) Domestic hard cuts: Yinman mining, beneficiation, and tailings systems all stopped, impact to be quantified. Xingye Silver&Tin announced on Jul 30: Yinman Mining's mining system and beneficiation tailings system have both stopped production ; previously, the buffer maintained by the beneficiation plant relying on 350,000 mt of surface ore was also cut off; with a 1.65 million mt/year mining and beneficiation scale, a core tin-silver mine, estimated impact on tin metal content from a 1-2 month short suspension is about 1,000 mt, and if the investigation/rectification is extended, the domestic ore supply deficit will further widen.

(2) Three overseas disruptions persist : Myanmar Wa State's exports to China in June were only 6,392 mt in physical content, with the rainy season extended to late Aug and explosives approval delays, production resumptions still at 40%–50% of pre-ban mine levels; DRC's Bisie squeezed by armed conflict and Ebola (cumulative confirmed cases over 3,400, fatality rate about 44%), putting global 6% supply at risk of cliff-edge; Peru energy crisis puts local tin mines under pressure; only Indonesia's Timah concluded its annual inspection, with August exports recovering MoM as a partial offset .

(3) Smelting and demand : Yunnan 40% tin concentrates TC about 17,500 yuan/mt, still at a low level; Yunnan refined tin operating rate around 80%, Jiangxi at 32%–35% low level, ore tightness → limited ingot growth transmission not broken; demand side off-season solder and alloy operating rates low, but new energy vehicles + AI computing power + late Aug Apple/Huawei new phone stockpiling constitute 3–4% of global consumption marginal growth, acting as an amplifier for "small variety, large elasticity."

Spot market (8/4 review)

Transactions : High-level stagnation persisted. During the 8/4 daytime session, downstream solder and enterprises still mainly made small-batch purchases for rigid demand, with very few chasing prices above 430,000; after the night session surged to 432,700, traders held back from selling, raising premiums, but actual upstream and downstream transactions circulated more in the midstream, with end-user orders concentrated in the 42.5–430,000 range ——without volume support above 430,000, a divergence of "futures hitting new highs, spot falsely following" is likely to occur.

[Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and internal database models, for reference only and do not constitute decision-making advice. The provided information is for reference only. This article does not constitute direct investment research decision advice. Clients should make decisions cautiously and not substitute this for their own independent judgment. Any decisions made by clients have no relation to Shanghai Metals Market.]