Futures
LME: LME three-month tin remained firm overnight. LME tin inventory on August 20 stood at 1,715 mt, up 85 mt on the day, with a cumulative decrease of 90 mt over the past week and a cumulative increase of 25 mt over the past month—1,715 mt is at an all-time low (since August 2022, the average was 4,333 mt, currently ~60% below the average). Southeast Asian tin ore supply disruptions and low inventory are supporting a "tight spot supply" situation.
China (August 19 daytime session → August 20, 01:02 night session): SHFE tin 2609 ended the daytime session at about 419,500 yuan/mt (-1.35%, a single-day plunge of 5,760 yuan) (Yangtze Tin Network/CCMN, 11:30 quote); in the night session (August 20, 01:02), the 2609 contract settled at 424,300 yuan/mt, up 3,880 yuan or 0.92%, opening at 422,340, high 426,400, low 422,260, with a trading volume of 72,000 lots, open interest of 32,100 lots (daily change -2,106 lots), and capital outflow of 175 million yuan—the night session rebound reclaimed the 424,000 level, and the 420,000 defense battle achieved initial success.
August 20 morning session opening reference: The 2609 contract is likely to open between 422,300–425,000 yuan/mt (centered around the night session close of 424,300). The 422,000 level (above the night session low of 422,260) is the first retracement support, and the 426,400 level (night session high) is the first resistance. If the morning session can reclaim the 425,000 level, a retest of the 428,000–430,000 area (the high area from the August 12 daytime session) is expected; otherwise, the contract is likely to consolidate in a range of 422,000–426,000 during the day.
Inventory:
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LME tin inventory on August 20 was 1,715 mt, up 85 mt on the day, remaining at an absolute low and keeping the tight spot supply situation intact;
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SHFE tin inventory is approximately 5,485 mt, with total exchange tin inventory (LME+SHFE) at around 7,200 mt;
Macro: The probability of a September rate hike is about 33%, and Goldman Sachs calls it "very unlikely." The July FOMC minutes, released in the early morning, focused on a "9-to-3 split."
(1) CPI, PPI, and retail sales all came in soft, reducing the probability of a September rate hike to about 33%. The US July CPI rose 3.4% YoY (the lowest since March, prior 3.5%), and core CPI rose 2.5% YoY (prior 2.6%); July PPI increased 4.7% YoY (prior 5.5%) and was flat MoM (expected +0.2%); July retail sales fell 0.6% MoM, the biggest monthly drop in over a year. Multiple sources, including CME FedWatch/CEB International/Cfi.cn/Securities Times, agree: the probability of a 25bp September rate hike has fallen to about 33% (down from 75% in late July), while the probability of holding rates at 3.5%–3.75% has risen to about 67%. The Polymarket probability has dropped to about 25%. Goldman Sachs chief economist Hatzius: A September rate hike "has become very unlikely," and the market's pricing of the fed funds rate remains overly hawkish (Wallstreetcn/Penguin account).
(2) The July FOMC meeting minutes were released at 2:00 AM Beijing time on August 20. This is the minutes of the July 29 meeting, which marked the fifth consecutive hold with three hawkish dissents (Hammack, Kashkari, Logan) for rate hikes. BMO’s Ian Lyngen judged that “the committee has vocal hawks, but the majority leans toward aligning with Warsh and maintaining the stance at least through September”; the minutes provide a “framework for understanding, not a forecasting tool”—market focus on the detailed language of the 9:3 split and its impact on pricing for the September 16 FOMC meeting is the key macro anchor for this morning’s session.
(3) Jackson Hole 2026 will take place from August 27 to 29, with Warsh’s keynote speech on the morning of Friday, August 28. This is Warsh’s first Jackson Hole appearance since assuming the chairmanship on May 22, under the theme “Financial Innovation: Payments and Policy Implications.” Multiple analyses (Regards of Wall Street, WealthFargo, Taishin Securities) concur: Warsh already signaled in June that there would be no dot plot disclosure, a shortened forward guidance, and a preference for “letting the market guess”; recently he said Jackson Hole would focus on “long-term structural issues rather than near-term data”—expectations are that Warsh will not release a clear rate signal this time, but with July nonfarm payrolls at -23,000 and inflation still at 3.4%, this 20-minute speech serves as the “deciding sentence” before September. The real factors shaping the September 16 FOMC remain the July PCE on August 26, Warsh’s speech on August 28, the August nonfarm payrolls on September 4, and the August CPI on September 11.
(4) Geopolitics and the AI supply chain: The Strait of Hormuz situation remained fluid (Iran denied full reopening, and US-Iran relations remain a variable for oil prices); US crude oil inventories rose by 17.4 million barrels in a single week (the largest increase since January 2023), suppressing oil prices to around $82 and easing inflation concerns; Foxconn Industrial Internet’s H1 net profit grew by 96%, AI server capex stayed high, and tin “solder alpha” provided medium and long-term support without breaking down.
Fundamentals: The full suspension at Yinman and the 50% cap in Wa State kept ore supply constraints tight.
(1) Mining, processing, and tailings operations at Yinman are fully suspended, and the duration of the shutdown remains uncertain. Xingye Silver&Tin announced on July 31 (Announcement Nos. 2026-62, 257, 260): an accident on July 26 caused one fatality, leading to the suspension of underground mining areas on July 28 and the simultaneous halt of the beneficiation and tailings systems on July 30; as of the announcement date, both the mining system and the beneficiation/tailings system have been suspended, the causes of the accident and the death are still under investigation, the duration of the shutdown cannot be determined, and the impact on current and full-year results cannot yet be accurately estimated. This core tin-silver mine, with a capacity of 1.65 million mt per year, is estimated to result in a loss of approximately 1,000 mt of tin metal content if the short stoppage lasts 1 to 2 months (accounting for 3%–4% of China’s tin concentrates); if the investigation/rectification period extends into Q4, the domestic ore supply deficit will widen further.
(2) Wa State’s “50% output cap” remains unchanged: the annual production resumption ceiling is locked at 40%–50% of pre-ban levels, with full resumption postponed to 2027 (as estimated by ITA). In February, the cost-sharing of water pumping fees (a 5% export levy plus the original 30% in-kind tax, equaling a combined 35%) raised mining costs. In April, an explosion at the Bangkang explosives plant disrupted the explosives supply chain. In July, Myanmar’s monthly tin ore exports to China returned to above 6,000 mt, still only 40%–50% of normal levels.
Spot Market
Premiums: Small-brand tin was at parity to a premium of 500 yuan/mt against September futures, Yun-branded tin at a premium of 500–1,000 yuan/mt, and Yunnan Tin at a premium of 1,000–1,500 yuan/mt. The underlying structure of tight available supply from major producers remains intact, but traders’ efforts to hold prices firm have been significantly weakened under the pressure of high prices.
Trading: “Transactions were dominated by rigid demand, with no overall volume expansion.” On the futures side, the daytime session pulled back from above 425,000 to 419,530, with an intraday low of 416,860. Downstream and end-users inquired and showed greater willingness to fix prices in the 416,000–420,000 range than before. Some solder plants and electronics enterprises completed small-volume transactions in the morning. However, above 420,000, solder plants basically placed no orders, with weak willingness to chase prices. The whole day was a case of “rigid demand being released after the retreat from highs, rather than the start of active restocking.” Ordinary consumer electronics and conventional solder remain in off-season wait-and-see mode; demand for high-end solder related to AI servers and advanced packaging shows resilience but is not enough to drive a volume increase in the spot market in the short term.
[Data source statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and its internal database models. They are for reference only and do not constitute decision-making advice. The information provided is for reference purposes only. This document does not constitute direct advice for investment or research decisions. Clients should make prudent decisions and not substitute this for independent judgment. Any decisions made by clients are unrelated to Shanghai Metals Market.]
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