SHFE and LME showed obvious divergence in trends, while domestic spot market trading was relatively sluggish [[SMM] Tin Futures Brief Commentary]

Daily Commentary on the Most-Traded SHFE Tin Contract on May 6, 2025

The most-traded SHFE tin contract (SN2506) exhibited an in-the-doldrums trend during the day. It briefly surged to 262,000 yuan/mt in the morning session but pulled back in the afternoon due to macro headwinds, eventually closing at 260,970 yuan/mt, down 0.32% from the previous trading day. LME tin, on the other hand, rose 2.66% to $31,700/mt amid disruptions in overseas supply, leading to a significant divergence in the performance of SHFE and LME tin.

The US Department of Commerce signaled a "phased adjustment of certain tariffs," but the risk of tariff increases in key areas such as AI chips and consumer electronics remains unresolved. Tin, as a core raw material for electronic solder, has seen its downstream export demand (e.g., semiconductor packaging, consumer electronics) directly suppressed by the uncertainty surrounding tariff policies. The market fears that if the US further expands the scope of tariff increases, China's tin solder exports may face dual pressures of rising costs and order losses, resulting in weaker-than-expected restocking demand after the holiday.

US non-farm payrolls data for April exceeded expectations (with 175,000 new jobs added), coupled with a slowdown in Q1 GDP growth, leading the market to push back expectations for a US Fed interest rate cut to July. The US dollar index remained fluctuating at highs around 99.8. Although the US Fed maintained interest rates unchanged at its May meeting, the policy statement emphasized the need for "more evidence of inflation easing." Expectations for tighter US dollar liquidity have suppressed the overall valuation of the non-ferrous metals sector, with SHFE tin significantly dragged down by macro sentiment.

Market Performance and Spot Market Dynamics

Trading was sluggish, with a strong wait-and-see sentiment. Restocking efforts in the spot market after the holiday were weaker than expected, with downstream enterprises primarily engaging in just-in-time procurement and some undertaking limited restocking. A stalemate emerged between smelters' reluctance to sell and terminals' cautious procurement.