US dollar index fluctuates at highs, suppressing non-ferrous metal prices; SHFE tin price shows a pattern of jump initially and then pull back [[SMM Tin Futures Brief Comment]]

Daily Review of the Most-Traded SHFE Tin Contract (SN2506) on May 8, 2025

The most-traded SHFE tin contract (SN2506) exhibited a pattern of jumping initially and then pulling back today. In the morning session, it surged to 262,000 yuan/mt, buoyed by expectations of RRR cuts and interest rate cuts by the PBOC, as well as the US-China economic and trade talks. However, it pulled back in the afternoon session due to uncertainties surrounding US tariff policies and a strengthening US dollar, eventually closing at 261,480 yuan/mt, down slightly by 0.16% from the previous trading day. Total open interest in the night session decreased slightly to 31,000 lots.

​​Concerns Over the US Economy: The US GDP contracted by 0.3% QoQ in Q1, with core PCE inflation rising to 3.5%, consumer confidence falling to historical lows, and the manufacturing PMI pulling back to 48.7, indicating intensified downward pressure on the economy. The US Fed maintained interest rates unchanged, postponing interest rate cut expectations to July. The US dollar index fluctuated at highs, exerting pressure on the non-ferrous metals sector.

​​Demand Side: Solder companies have seen stable but not significantly increased orders post-holiday. US tariff policies on Chinese electronics have dampened downstream restocking expectations, with spot market transactions remaining mediocre and traders reporting low inquiry willingness.

Spot transaction prices ranged from 260,500 to 262,500 yuan/mt. However, smelters are holding prices and reluctant to sell, with downstream buyers primarily making just-in-time procurement. Lower-priced supplies are favored.

​​Short-Term Volatility Expected: The most-traded SHFE tin contract is expected to operate within the range of 255,000-265,000 yuan/mt, with LME tin expected to trade within the range of $30,000-33,000/mt. It is facing pressure from the 60-day moving average (266,000) above and strong support at (257,000) below.