Weakening US dollar index boosts prices of non-ferrous metal sector [SMM tin midday review]

Daily Commentary on the Most-Traded SHFE Tin Contract and Analysis of LME Tin Contracts

Today, the most-traded SHFE tin contract (SN2508) continued its strong performance, opening at 268,420 yuan/mt. It pulled back slightly in the morning session, reducing its gains, and eventually closed at 268,710 yuan/mt, with a daily increase of 0.76%. During the night session, SHFE tin fluctuated at highs, with market sentiment supported by macroeconomic policies and a tight supply-demand situation.

The final Q1 GDP of the US was revised down to a contraction of 0.5%, and initial jobless claims were lower than expected, leading to increased expectations for a US Fed interest rate cut. The US dollar index weakened, boosting the prices of dollar-denominated commodities.

Domestically, efforts to stabilize growth have intensified, with the central bank and six other departments introducing 19 measures to boost consumption, enhancing expectations for metal consumption and leading to a rebound in market risk appetite.

​​Tight tin ore supply​​: The progress of production resumptions in Myanmar's Wa region has lagged (with less than 50% completion of tunnel repairs), coupled with Thailand's restrictions on the transit transportation of Myanmar's tin ore, leading to a continuous decline in domestic tin ore imports in June.

​​Short-term trend forecast​​: SHFE tin may continue to fluctuate at highs, with a support level of 268,000 yuan/mt and a resistance level of 272,000 yuan/mt. Caution should be exercised regarding the risks of faster-than-expected production resumptions in Myanmar and weaker-than-expected demand from the consumer electronics sector.

The most-active LME tin contract closed at $33,570/mt, with a daily decrease of 0.71%. LME tin inventory has continued to decline, reflecting the reality of tight global supply. Restrictions on exports from Myanmar and Indonesia have exacerbated the shortage of overseas raw materials. Technical analysis​​: LME tin has broken through the key resistance level of $33,000. If it holds above this level, it may test $34,500, with support at $32,000.