The tug-of-war between longs and shorts at the 417,000 yuan/mt level, SHFE tin is expected to drift higher today [SMM tin morning briefing]

[Futures] The most-traded SHFE tin SN2610 contract opened at 418,870 yuan/mt in the night session on September 7, hit a high of 420,760, a low of 416,200, and closed at 419,160 yuan/mt, up 0.53%. In the daytime session on September 7, it closed at 418,870 yuan/mt, up 610 yuan/mt (+0.15%) from the previous settlement of 418,260, with daytime trading volume of 99,700 lots and open interest of 36,900 lots, down 626 lots. Total SHFE tin open interest was 68,000 lots, down 196 lots, with longs down 303 lots and shorts down 540 lots. Shorts reduced positions more than longs, indicating more short covering. LME tin closed at $55,989/mt on September 7, up $543/mt (+0.98%). LME tin inventory was 5,415 mt, down 55 mt from the previous day, and the ratio of cancelled warrants stayed high at 26.50%.

[Macro] US August nonfarm payrolls rose by 162,000, far exceeding expectations. CME FedWatch showed the probability of a 25bp rate hike in September rose to 58.3%, and the probability of a hike in October was 69.8%, with rate hike expectations and risk-off sentiment in a tug-of-war. US-Iran conflict escalated and crude oil broke above $97/barrel, with safe-haven buying supporting base metals. China's central bank conducted 500 billion yuan of outright reverse repos to support liquidity.

[Fundamentals] SHFE tin inventory was 5,120 mt, up 463 mt from the previous day (Shanghai +509 mt, Guangdong -46 mt), with a slight domestic inventory buildup. July solder operating rate was 72.8%, at a low level for the same period in the past five years. AI computing tin demand was 19,300 mt in full-year 2026, rising to 41,100 mt in 2030 (CAGR 16%). Myanmar Wa State exported 1,077 mt Sn of tin concentrates to China in July, down 27% MoM. Indonesia's Timah exported 2,483 mt of tin ingot to China in August, and Indonesia's total August exports were 4,564 mt, recovering to the expected range.

[Summary] At the 417,000 yuan/mt level, there is a tug-of-war between longs and shorts. SHFE tin is expected to drift higher today, with support at 414,000 and resistance at 420,000.

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