Myanmar Wa State's Mining Ban Policy Remains Unlifted; SHFE Tin May Continue High-Level Fluctuations [SMM Tin Brief Review]

Daily Review of the Most-Traded SHFE Tin Futures Contract on February 17, 2025

The most-traded SHFE tin futures contract (SN2503) exhibited a pattern of jumping initially and then pulling back. The opening price was 264,900 yuan/mt, higher than the previous trading day's settlement price. During the session, it reached a high of 266,250 yuan/mt and a low of 259,990 yuan/mt, eventually closing at 260,980 yuan/mt, unchanged from the previous trading day's settlement price. The intraday trading volume amounted to 20.703 billion yuan.

II. Fundamental Analysis

1. Supply-Demand Pattern

   • Pressure on the Supply Side: The mining ban policy in Wa State, Myanmar, remains unresolved, and tin ore import volumes continue to stay at low levels. Coupled with factors such as declining ore grades and rising environmental protection costs at domestic smelters, concerns over tight tin ore supply persist.

   • Weakness on the Demand Side: Trading in the spot market was sluggish, with downstream buyers showing strong resistance to high prices and low purchase willingness. The growth rate of new PV installations has slowed.

2. Inventory Changes

   • Accumulation in Domestic Inventory: Tin inventory at the Shanghai Futures Exchange increased to 6,147 mt, up by 369 mt from the previous trading day, with a significant rise in Shanghai region inventory (+343 mt), indicating heightened short-term supply pressure.

   • Divergence in Overseas Destocking: LME tin inventory rose to 3,910 mt, but LME tin prices, supported by a weaker US dollar, fluctuated to $32,430/mt, showing a divergence between inventory and price trends in domestic and overseas markets.

3. Macro Factors

   • Decline in the US Dollar Index: Weak US retail sales data for January led to a pullback in the US dollar index to 106.64, providing short-term support for the base metals sector.

   • Policy Expectation Dynamics: Optimism about policies from the Two Sessions in the domestic market contrasts with cautious trading ahead of the US Fed meeting minutes and the release of US PMI data.

IV. Technical Analysis and Capital Movements

• Technical Patterns: On the daily chart, prices jumped initially and then pulled back, with significant resistance at 265,000 yuan/mt. The shortening of MACD indicator red bars suggests weakening upward momentum.

• Changes in Open Interest: Open interest in the most-traded contract decreased by 703 lots to 30,066 lots, as some bulls took profits and exited. However, the high opening in the night session indicates divided market sentiment regarding future trends.

V. Market Outlook

In the short term, SHFE tin is expected to maintain a high-level fluctuation pattern, with mixed bullish and bearish factors:

• Bullish Factors: A weaker US dollar, a rebound in overseas tin prices, and expectations of tight supply.

• Bearish Risks: Accumulating domestic inventory, widening spot discounts, and weaker-than-expected recovery in end-use demand.