The most-traded SHFE tin contract is expected to maintain sideways movement, with a breakthrough dependent on an escalation of the conflict in the DRC or a more-than-expected easing of macro policies. [SMM Tin Midday Review]

March 27, 2025 Midday Commentary on the Most-Traded SHFE Tin Futures Contract

The most-traded SHFE tin contract (SN2504) bottomed out in the morning session, opening at 279,500 yuan/mt, slightly dipping to 278,000 yuan/mt, and then rebounded supported by macro policy disturbances and supply-demand imbalance, closing at 279,450 yuan/mt at midday, up 0.27%. The intraday fluctuation range was 277,000-280,000 yuan/mt, with open interest decreasing by 2,879 lots to 10,000 lots, indicating cautious market sentiment. LME tin prices moved in sync, quoted at $34,900/mt during the Asian session. US Fed policy disturbance: Although the US Fed maintained interest rates unchanged at its March meeting, the President of the Federal Reserve Bank of Chicago stated that "interest rate cuts will take longer," coupled with the Trump administration's announcement of a 25% permanent tariff on automobiles, the US dollar index rebounded to a high of 104.3, suppressing the valuation of non-ferrous metals. Option implied volatility remains high: The implied volatility of SHFE tin options remains above 38%, with the premium rate of out-of-the-money call contracts reaching 220%, reflecting market divergence in pricing the situation in the DRC. Midday trend forecast: The most-traded SHFE tin contract is expected to maintain a sideways movement between 278,000-283,000 yuan/mt, with a breakthrough dependent on an escalation of the conflict in the DRC or unexpectedly loose macro policies.