Macro liquidity expectations and a weak spot market constrain each other, with the most-traded SHFE tin contract continuing to consolidate at highs [SMM Tin Midday Review]

Aug 5, 2026 Tin Midday Review

Today, the most-traded SHFE tin contract (sn2609) consolidated at highs, opening at 431,500 yuan/mt and closing the morning session at 429,490 yuan/mt, recording a gain of 0.50% from the previous trading day's settlement price. The open interest of the most-traded contract slightly decreased to over 59,000 lots, with overall market participation sentiment remaining active. On the LME side, LME three-month tin was quoted at $55,830/mt, overall maintaining consolidation at highs.

On the macro front:

(1) Statements from relevant US Fed officials gradually turned dovish. US Treasury Secretary Bessent indicated that core inflation is slowing down, and the Fed seeks to maintain policy flexibility; Fed official Paulson also noted that current policy is "moderately restrictive," and energy price fluctuations can be ignored for now, with policy reevaluation if inflation shows no new progress. The market now holds a relatively balanced view on the US Fed's subsequent policy path (with a relatively calm tug-of-war between interest rate cuts and hikes/maintenance), and given the August policy vacuum period before the FOMC meeting, there was no excessive betting or panic withdrawal of funds.

(2) Domestic open market liquidity injection: The People's Bank of China announced today that it would conduct a 500 billion yuan outright reverse repo operation via fixed quantity, rate-based tender, and multiple-price auction, for a term of 3 months (92 days), with a maturity date of November 5, 2026, effectively bolstering medium and long-term liquidity in the banking system.

(3) Middle East geopolitical negotiation progress: Iranian Foreign Ministry spokesperson Baghaei stated on August 4 that Iran is still negotiating with Oman on the Strait of Hormuz matters, with "positive progress" made at both technical and political levels, and geopolitical sentiment marginally eased.

Spot side, overall market trading remained sluggish, with the suppression of end-user orders by absolute high prices remaining a tangible factor. According to feedback from suppliers, during the morning session today, the number of low-price orders slightly increased, mainly driven by just-in-time needs.

Overall, on the macro front, overseas monetary policy officials' statements tended dovish, and under the August policy vacuum period, fund sentiment was generally favorable, with the market maintaining high-level tug-of-war under balanced expectations. On the fundamental front, support from domestic social inventories at low levels and the slow recovery pace on the supply side remained solid, combined with the most-traded contract's open interest of nearly 60,000 lots, building a solid defense for the futures bottom. Although the physical market's weak high-price acceptance limited upside breakthrough space, under the underpinning effect of funds and the tight fundamentals, the most-traded SHFE tin contract is expected to maintain high-level range-bound consolidation in the short term.