Supply-Side News Continues to Cause Disturbances, SHFE Tin Prices May Hover at Highs [SMM Tin Morning Meeting Summary]

SMM Tin Morning Meeting Summary on February 17, 2025

Last week, the tin market overall exhibited strong futures performance and relatively weak spot market conditions, mainly influenced by supply-side disruptions and positive macroeconomic signals. The most-traded SHFE tin contract continued to rise after the holiday. In terms of supply, intensified armed conflicts in North Kivu Province of the DRC heightened concerns over disruptions in African tin ore supply, while the mining ban in Wa State, Myanmar, has yet to be lifted, further supporting the anticipated rise in tin prices. On the demand side, although most downstream enterprises have gradually resumed operations after the Chinese New Year holiday, end-user purchase willingness remained weak, leading to subdued spot market demand and overall low operating rates. In the macroeconomic environment, the US January ADP employment increased by 183,000, significantly exceeding expectations, indicating resilience in the labour market. However, the ISM Services PMI fell short of expectations, and the US Fed's interest rate cut policy remains on hold, which somewhat constrained the upward momentum of tin prices. Indonesia's January refined tin exports dropped sharply by 66.6% MoM, while tin concentrate TC in Yunnan Province continued to decline, compounded by the slow resumption of smelter operations after the holiday. In terms of inventory, SMM tin ingot social inventory across three regions and SHFE tin inventory both saw inventory buildup, while LME tin inventory continued to decrease. In the short term, SHFE tin prices are expected to hover at highs. Investors should closely monitor changes in overseas ore supply and macroeconomic policy trends, while being cautious of volatility risks arising from the spread between futures and spot prices. As the Two Sessions approach, market expectations for macroeconomic policy benefits are strengthening, and attention should be paid to statements from relevant representatives. The US dollar index weakened, boosting SHFE tin prices denominated in yuan, while the strong performance of gold and other precious metals also provided supportive linkage to the non-ferrous sector. From a technical perspective, after the most-traded SHFE tin contract recently broke through the 260,000 yuan/mt level, the short-term resistance level has shifted upward to around 265,000 yuan/mt, with support below at 255,000 yuan/mt. In the coming period, SHFE tin prices may hover at highs, with a mix of bullish and bearish factors. Bullish factors include a weaker US dollar, expectations of overseas destocking, tight domestic supply, and policy-driven demand stimulation. Bearish risks include slower-than-expected downstream resumption, expanded spot discounts suppressing purchase willingness, and selling pressure triggered by high prices. Investors should closely follow the US Fed's policy developments and the progress of tin mine resumption in Myanmar.