Tonight at 20:30 US July CPI to Set the Tone for September Rate Hike Path SHFE Tin 427,000 Battle Continues [SMM Tin Morning Brief]

Futures

LME: LME three-month tin on August 11 settled around $55,900/mt (On August 11, LME tin inventory was 5,640 mt, +50 mt; registered warrants: 4,775 mt; cancelled warrants: 865 mt; cancelled warrant ratio: 15.34%). The cancelled warrant ratio remained above 15%, approaching the 20% squeeze alert line, and deliverable supply outside China remained tight.

China (Aug. 11 daytime session → night session): SHFE tin 2609 contract during the daytime session settled at 423,900 yuan/mt, down 4,470 yuan, or 1.04%, opening at 426,890, high 428,450, low 422,510, volume 176,425 lots, open interest 47,559 lots (-3,321 lots), the position-reducing pullback showed profit-taking at high levels. The night session opened high at 426,050 yuan/mt, surged to a high of 429,160 before giving back gains, and as of 23:43, was trading around 426,680 yuan/mt, still above the daytime close.

Inventory:

• LME tin inventory on Aug. 11 was 5,640 mt, +50 mt from the previous day (Aug. 10 was 5,590 mt, -100 mt), cancelled warrants at 865 mt, a ratio of 15.34%—the structure of “5,600–5,700 mt historically low + cancelled warrant ratio 15%+” remained unbroken, and squeeze expectations persisted;

• SHFE weekly tin inventory on Aug. 11 was 5,063 mt, -63 mt from the previous day (Aug. 10 was 5,126 mt, +278 mt), total exchange tin inventory (LME + SHFE) was approximately 10,700 mt;

Macro: Tonight at 20:30, the US July CPI is the “final major test before the verdict” for the September rate hike path

. (1) Market expectations overwhelmingly point to “YoY decline, MoM positive.” At 20:30 Beijing time on August 12, the US Labor Department will release the July CPI. The MarketWatch/Bloomberg/Dow Jones consensus: headline CPI up 0.1% MoM, up 3.4% YoY (prior: -0.4%/+3.5%); core CPI up 0.2% MoM, up 2.5% YoY (prior: 0%/+2.6%). Goldman Sachs is more optimistic, expecting headline CPI up just 0.05% MoM and core up 0.19%, both below consensus, mainly due to falling gasoline prices and cooling housing inflation.

(2) After the surprising nonfarm payrolls, the rate hike probability has swung back to around 50%. After the July nonfarm payrolls of -23,000, the September rate hike probability once dropped to 22%, but with the rebound in oil prices, it has recovered to around 50%. If tonight's CPI comes in line with or below expectations → the odds will dip further, and tin will leverage low inventory to rally to 429,000–435,000; if CPI comes in above expectations MoM (driven by oil prices) → the odds swing back above 65%, with a higher risk of topping above 423,000.

(3) Warsh’s “tough talk” cannot beat the data: two inflation reports will determine September’s fate. “New Fed Correspondent” Timiraos noted that Warsh has leaned hawkish since taking office in May, but the next two inflation reports (July + August CPI) and Warsh’s policy style will more directly decide the September choice. With no FOMC meeting in August (the Jackson Hole symposium is held in Wyoming in August), tonight’s CPI is the single most important data anchor before the September meeting.

(4) Geopolitics + AI chain: repeated twists in the Strait of Hormuz (Iran says it will not open unless conditions are met, and the US military is reportedly firing on Iran-linked vessels) kept crude prices volatile after an intraday plunge; US tech stocks consolidated (S&P 500 -0.3%, Nasdaq -0.6%), but sustained AI server demand release (Foxconn Industrial Internet’s H1 net profit +96% YoY) underpins tin’s “solder alpha”.

Fundamentals: Yinman’s full halt unresolved + Wa State capped at 50%, supply flexibility locked tight

(1) Yinman Mining’s mining/processing and tailings operations all shut down, with the outage duration still up in the air. Xingye Silver & Tin announced on July 31: mining systems, processing and tailings systems have all ceased operations, rendering the surface stockpile of 350,000 mt of ore ineffective; the core tin-silver mine with a 1.65 million mt/year mining and processing capacity, based on a brief 1–2 month shutdown, is estimated to affect tin metal content by roughly 1,000 mt (accounting for about 3%–4% of China’s tin concentrates supply, a marginal regional tightening).

(2) The Wa rainy season is winding down but the “50% cap” persists. The full-year production resumption ceiling is locked at 40%–50% of pre-ban levels, with full resumption postponed to 2027; the water-pumping fee apportionment in February (a 5% levy on exports plus the original 30% in-kind tax = a combined 35%) pushed up mining costs and dampened miners’ willingness to resume production, and the April explosion at the Panghkam explosive plant disrupted the explosives supply chain; July’s monthly tin ore exports from Myanmar to China recovered to above 6,000 mt, but still only 40%–50% of normal shipping volumes.

Spot market (Aug 11 recap + Aug 12 morning estimate)

Transactions: “ the spot market turned bearish and cautious, with overall rigid restocking dominating.” After futures pulled back from above 436,000 in the Aug 7 night session, downstream and end-user willingness to inquire and fix prices in the 425,000–430,000 range improved relative to earlier, with some solder plants and electronics companies completing small-volume deals in the morning; however, in the afternoon, after the futures hovered around 427,000–428,000, follow-up buying turned tepid again. The whole day was "release of rigid demand after retreating from highs, rather than initiation of active restocking"——Ordinary consumer electronics and conventional solder remained in off-season wait-and-see mode, with only rigid purchasing maintained; demand for high-end solder related to AI servers and advanced packaging showed resilience but was not enough to boost spot volume in the short term.

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