Futures
LME: The official LME 3-month tin price settled at $55,223/mt on August 28, down $305 or 0.55%, with an intraday high of $55,885 and a low of $55,195. Tin's decline was in the middle of the pack amid broad losses across London base metals (zinc -1.09%, nickel -1.23%, tin -0.55%, copper -0.70%, aluminum -0.71%). On August 31, the LME was closed for the UK Summer Bank Holiday, leaving the SHFE without external guidance. LME tin inventory stood at 5,590 mt (unchanged on 8/28 after +470 mt on 8/27), with cancelled warrants at 690 mt and a cancellation ratio of 12.34%—the inventory rebound following consecutive destocking has been digested by the market, and 5,590 mt remains at an absolute historical low. The "squeeze backdrop" of low inventory plus mid-to-high cancellations remains intact, though its urgency has marginally eased.
China (night session on August 28 → daytime session on August 31): The most-traded 2610 contract closed the night session at 417,760 yuan/mt, down 4,240 yuan or 1.00%, opening at 423,850, with a high of 424,980 and a low of 414,760. Trading volume was 108,800 lots and open interest was 42,400 lots. The daytime session on August 31 extended the weakness: the 2610 contract closed at 419,000 yuan/mt, down 3,000 yuan or 0.71%, with an intraday range of 414,600–418,700—after Warsh's speech, the US dollar index jumped above 99.70 (a new high since August 14), and the 2-year Treasury yield surged 10bp intraday to 4.33%. The 420,000 round-number level has shifted decisively from "long-term support" to an "immediate battleground," with the daytime low of 414,600 serving as the first line of defense in the short term. The 2609 contract closed at 416,960, down 0.99%.
Macro: Warsh struck a hawkish tone in his Jackson Hole debut, with the probability of a September rate hike surging from 35% to 57%, leaving a policy window open for a September hike
(1) Warsh's keynote speech at 22:00 on August 28 was "hawkish" and exceeded expectations. This was Warsh's first Jackson Hole appearance since taking office as Fed Chairman on May 22, and he mentioned "inflation" 25 times in the speech. Core hawkish signals: ①The 2% PCE target is "firm and fixed", and there should be no misunderstanding; ②Although this summer's PCE and CPI readings were better than expected, "they do not tell me that the underlying trend has improved materially"; ③PCE was up 3.7% YoY, with a 6-month annualized rate of 4.1%; breaking down 199 components, 54% of items still posted increases above 3% over the past 12 months (versus a post-pandemic peak of 77% and a pre-pandemic 20-year average of 32%); ④"It is difficult to characterize broad financial conditions as restrictive"—corporate bond and leveraged loan spreads are at historical lows, July commercial and industrial lending standards were loose, and real consumption has grown by more than 2% over the past four quarters; ⑤"The short-term interest rate is the primary tool for achieving the dual mandate", making clear that higher inflation will require a higher federal funds rate.
(2) The probability of a September rate hike surged from 35% to about 57%. After Warsh's speech, CME FedWatch data showed the probability of a 25bp hike in September jumped from about 35% before the meeting to nearly 60% .
(3) Warsh "did not give clear forward guidance" but left the policy window open. When discussing the structure of his speech, he quipped on the spot: "You can call this an outline, or you can call it a roadmap—but whatever you do, don't call it forward guidance"—consistent with the market's expected "constructive ambiguity" communication style.
(4) Three hurdles before the September FOMC : ① September 4 US August nonfarm payrolls —Warsh made clear that "inflation has not materially improved + financial conditions are not restrictive," so if payrolls remain strong, the probability of a September hike could rise further to 70%+; ② September 11 US August CPI —Tianfeng Securities: if it pulls back more than expected, the US Fed may stay on hold; otherwise the probability of a hike will rise further; ③ September 15–16 FOMC decision —Warsh's speech has already reserved a window for a hike, but whether it materializes will depend on the two data releases above.
(5) AI becomes a new variable : Warsh was very optimistic about AI development in his speech, believing AI could become a new factor of production, bringing higher productivity and economic growth. He explicitly said that "more than half of the increase in US capital spending this year may come from AI construction," calling AI a historic turning point that could bring "significantly higher growth"— this provides medium and long-term narrative support for tin's "solder alpha" , but it is hard to offset macro pressure in the short term.
Fundamentals: hard constraints on the ore side remain unrelieved, but traditional demand off-season + high-price negative feedback persist
(1) Smelting side : Yunnan 40% tin concentrates TC at about 18,000 yuan/mt, Guangxi/Jiangxi/Hunan 60% TC at 14,000 yuan/mt; July China tin ingot production was 15,290 mt, -4.08% YoY ; this week, the combined refined tin operating rate in Jiangxi and Yunnan provinces edged up to 64.38%, with limited room for improvement.
(2) The demand-side divergence of "AI high prosperity + traditional off-season" continues : global semiconductor sales in January–June rose 86.2% YoY, and the AI demand narrative faces validation from earnings data; however, traditional consumer electronics, solder, automobiles, and home appliances remain in the off-season, with high-price negative feedback clearly evident. The operating rate of solder enterprises fell to 72.8% in July, and spot premiums in August dropped to 550–567 yuan/mt MoM—high-price negative feedback materialized, and tin prices are expected to consolidate on a subdued note in the short term. Guotai Junan Futures believes "the market is currently in a tug-of-war between 'tight reality and loosening expectations,' and tin prices may continue to swing wildly, with mid-September to October likely being a key window for supply-demand conditions to shift from tight to loose."
In the spot market
, transactions: Although spot trades were relatively active and traders quoted actively, transactions were mostly small and scattered orders, lacking large-scale concentrated restocking.
[Data source statement: Except for public information, all other data are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and do not constitute decision-making advice. The information provided is for reference only. This article does not constitute direct advice for investment research decisions. Clients should make decisions prudently and not use this as a substitute for independent judgment. Any decisions made by clients have nothing to do with Shanghai Metals Market]
