The Strengthening US Dollar Suppresses SHFE Tin Prices Awaiting Macro Adjustments [SMM Tin Morning Meeting Summary Nov 25]

The latest unemployment data released by the US Department of Labor has garnered significant market attention. According to the data, the number of initial jobless claims in the US has dropped to 213,000, a decrease of 6,000 from the previous week and below the expected 220,000. This better-than-expected unemployment data reveals the robustness and vitality of the US labour market, thereby boosting market confidence in the US economic outlook to some extent. Against this backdrop, the US dollar exchange rate has received solid support. Additionally, given the positive performance of the unemployment data, the US Fed may consider further tightening monetary policy. This move would not only provide additional support to the US dollar exchange rate but could also exert a suppressive effect on metal prices.

In the domestic tin ore market, the import volume of tin ore in October showed a significant upward trend, mainly driven by increases from Myanmar, Nigeria, and Bolivia. Although the timetable for the resumption of Myanmar's tin ore production remains unclear and its export volume is expected to remain low until year-end, the incremental imports from Nigeria and Bolivia have somewhat alleviated the tight supply situation. However, considering Bolivia's domestic smelting capacity, the sustainability of subsequent import volume from the country still requires further observation. These variable factors collectively influence the domestic tin ore supply landscape, thereby impacting the price trend of SHFE tin.

On the other hand, the import volume of tin ingot in October also showed a recovery trend, primarily due to the intermittent opening of the import profit window. Nevertheless, due to the instability of the profit window, the import volume of tin ingot is still difficult to recover to the level of the same period last year. Meanwhile, although the export volume of tin ingot has increased MoM, it is expected that its export volume will be difficult to achieve significant growth in the future due to the recent closure of the export window.

In summary, despite the slight decline in SHFE tin prices in the short term due to macroeconomic factors, given that the subsequent supply of ore is unlikely to meet the demand from the smelting side, SHFE tin prices are expected to show a fluctuating upward trend in the foreseeable future.