Tin prices fall back from highs, with bears in the most-traded contract concentrating on reducing positions [Open Interest Insights]

Market sentiment was bearish, with SHFE tin futures fluctuating and pulling back. In the afternoon, futures prices plunged. By the close of trading, the most-traded contract fell by 2.03%, closing at 263,520 yuan/mt. Trading volume remained flat MoM, while open interest declined significantly. In the Sn2508 contract's open interest ranking, the total number of long positions decreased by 1,148 lots, and the total number of short positions decreased by 1,807 lots.

From the perspective of specific seats, Guotai Junan Securities reduced its long positions by 330 lots and increased its short positions by 149 lots, resulting in a net decrease of 479 long positions to 1,438 lots, though it maintained its position as the top bull. The seat's position changes aligned with the trend of SHFE tin futures. In early June, SHFE tin futures fell sharply, breaking below the 250,000 mt level before stopping the decline and rebounding. The seat's net position also flipped from short to long. On June 27, SHFE tin futures challenged the 270,000 mt resistance level but failed to strengthen further, with futures prices fluctuating at highs. The seat's long exposure peaked the next day. Today, with futures prices plunging, the seat significantly reduced its positions.

Today, the main bears concentrated on reducing their positions. Hundun Tiancheng Securities, which recently held a relatively high net short position, took advantage of the futures market decline to reduce its short positions by 359 lots and secure profits, while slightly increasing its long positions by 82 lots. Nanhua Futures also reduced its short positions by 307 lots, with net short positions declining to 681 lots.

Jinrui Futures flipped from long to short at the end of June and also increased long positions and reduced short positions today, with net short positions declining significantly.

Similar to Jinrui Futures, Zhongtai Futures established short exposure when futures prices encountered resistance during the upward trend and reduced some positions as tin prices pulled back. Today, both long and short positions declined, but the reduction in short positions was larger, with net short positions decreasing by 364 lots to 599 lots.

There were few seats actively increasing short positions. Haitong Futures increased its short positions by 350 lots to 589 lots, becoming the seat with the largest position increase today.

CITIC Futures saw a decline in both long and short positions, but the reduction in long positions was larger, resulting in a net position flip from long to short. This seat had been expanding its long exposure during the process of tin prices stopping the decline and stabilizing, but in the recent stage of tin prices peaking and pulling back, it continuously reduced its long exposure and even switched to the bearish camp today.

From the fundamental perspective, the resumption of production in Wa State has been slow, and coupled with Thailand's ban on Myanmar's transit transportation, Myanmar's tin ore imports have remained below the 10,000 mt physical ton warning line for several consecutive months, with the issue of tight tin ore supply yet to be alleviated. Recently, the operating rate of domestic smelters has rebounded somewhat but still remains low. Downstream demand has been weak. In the PV industry, after the mid-year installation rush ended, orders for PV tin strips in east China have declined, with some producers' operating rates decreasing. In the electronics industry, electronic terminals in south China have entered the off-season, with terminal wait-and-see sentiment strong and orders only maintaining just-in-time procurement. The fundamentals show weak supply and demand, with bullish and bearish factors intertwined. The pattern of strong reality but weak expectations for tin continues, putting upward pressure on tin prices while providing downward support. Capital fluctuations and operational activities are quite evident. Today, with the futures price pulling back, funds that had previously gone short generally chose to take partial profits on their positions.

(Wenhua Comprehensive)