US July CPI Came in Mild, SHFE Tin 2609 Surged to 433,700 in Night Session Before Giving Back Gains [SMM Tin Morning Brief]

Futures

LME: LME three-month tin, driven by expectations for a mild CPI, shot up to 56,100 (+535, +0.96%, high 56,385), then gave back gains in the US session amid macro sentiment, settling near 55,500—"Asia-Europe shot up, US session gave back" pattern was highly synchronized with SHFE.

China (Aug 12 daytime session → night session): SHFE tin 2609 daytime session settled at 431,480 yuan/mt, up 5,950 yuan, up 1.40%, opening at 426,050, low 425,580, high 433,280, volume 170,653 lots, open interest 48,631 lots (+1,073 lots). In the night session, at 21:01 it opened higher to 432,860, high 433,740, but by 23:07 it pulled back to around 427,610 (-1,160, about -0.27%).

Inventory:

• LME tin inventory was around 5,640 mt, at historically extremely low levels, with the ratio of cancelled warrants around 15% — the "squeeze backdrop" of low inventory + high cancellations remained intact, but Aug 12 saw no further sharp destocking, and the near-term situation shifted from "active destocking pushing prices higher" to "low-level stalemate";

• SHFE tin weekly inventory was 5,063 mt (-63 mt on Aug 11 alone), and combined exchange inventory (LME+SHFE) was around 10,700 mt;

Macro: CPI came in mild, the probability of a September rate hike fell to 38%–43%, but core inflation stickiness remained

. (1) US July CPI was fully in line with expectations, and inflation eased mildly. BLS Aug 12 data: headline CPI YoY 3.4% (prior 3.5%, expected 3.4%), MoM +0.1% (prior -0.4%, expected +0.1%); core CPI YoY 2.5% (prior 2.6%, expected 2.5%), MoM +0.2% (prior 0%, expected +0.2%). Energy fell 1.5% MoM (gasoline -2.9%) and was the main drag; housing contributed about two-thirds of the monthly increase in headline CPI, and services inflation remained sticky.

(2) FedWatch: the probability of a September hold rose to 58%–62%, while that of a 25bp hike fell to 38%–43%. After the CPI release, the probability of holding rates at 3.5%–3.75% in September rose from about 52% on the previous trading day to 57%–61.9%, and the probability of a hike fell from 47%–50% to 38%–43% — the "easing trade" was concentrated in Asia-Europe trading and was the direct external driver behind SHFE tin's surge to 433,000 on Aug 12.

(3) But do not read the CPI as a "dovish done deal." Core CPI rebounded from 0 to +0.2% MoM, and housing stickiness remained; Warsh/Kashkari had not withdrawn their hawkish stance, and before September there were still August PCE (8/29), August nonfarm payrolls (9/4), August CPI (9/11)three reports ahead of the FOMC—today above 430,000 was not a one-way chase-the-rally day; it was a "high-level turnover day after rate-hike expectations cooled".

(4) Geopolitics and the AI chain: the outlook for resumed transit through Hormuz remained unclear, Fed officials sounded hawkish again, and Xinhua Finance characterized overall macro sentiment as cautious; but Foxconn Industrial Internet's H1 net profit rose 96% and AI server capex stayed high, while tin's "solder alpha" medium- and long-term floor has not been broken.

Fundamentals: full suspension at Yinman plus Wa State's 50% cap, hard supply constraints have not eased

(1) Yinman Mining's mining, processing and tailings operations were all suspended, with the duration of the halt still unresolved. Xingye Silver&Tin announced on 7/31 that its mining, processing and tailings systems had all been shut down, and the surface ore buffer of 350,000 mt had lapsed; for the core tin-silver mine with 1.65 million mt/year of mining and processing capacity, a short suspension of 1–2 months was estimated to affect about 1,000 mt of tin metal content (3%–4% of China's tin concentrates); if the investigation/rectification extends into Q4, China's ore supply deficit will widen further.

(2) Wa State's "50% cap" remained unchanged: the full-year production resumption ceiling was locked at 40%–50% of pre-ban levels, and full production resumption was postponed to 2027; the February water-pumping fee pass-through (a 5% increase on exports plus the original 30% in-kind tax = a combined 35%) raised mining costs, and the April explosion at the Panghsang explosives plant disrupted the explosives supply chain; in July, Myanmar's monthly tin ore exports to China recovered to more than 6,000 mt, still only 40%–50% of normal levels.

Spot market

8/12 spot: futures shot up, suppliers raised offers, and downstream buying was thin at high prices.

Transactions: "Supplier quotes stayed firm, but downstream buying was still mainly just-in-time procurement, and high prices suppressed buying appetite." Above 430,000, solder plants basically placed no orders, and price fixings were concentrated in the 425,000–428,000 range for midstream circulation plus sporadic just-in-time procurement; Yunnan Tin/Yun brand premiums remained at +900 to +1,500, but traders reported that "if premiums are pushed any higher, there will be no takers."

[Data source statement: Except for public information, other data are processed 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 advice on investment research or decision-making. Clients should make prudent decisions and should not use this as a substitute for their own independent judgment. Any decisions made by clients are unrelated to SMM】