SHFE tin prices drop back slightly in the night session, with Powell remaining tough [SMM tin morning news]

SMM Tin Morning Brief on July 31, 2025:

Futures market: The most-traded SHFE tin contract (SN2509) dropped slightly during the night session, closing at 266,700 yuan/mt, down 0.39% from the previous trading day.

Macro: (1) Samsung Electronics' semiconductor division reported profits far below expectations, reflecting deepening crises at the world's largest memory chip maker. Affected by US export controls on high-bandwidth memory chips and losses in its foundry division, the key unit posted an operating profit of 400 billion won (approximately $288 million) for the June quarter, compared with analysts' average estimate of 2.73 trillion won. Additionally, the company reported a net profit of 4.93 trillion won on Thursday, missing analysts' forecast of 6.37 trillion won. However, Samsung stated that operational losses at its foundry division are expected to narrow in H2 as demand gradually recovers. (2) US Fed Chairman Powell said Wednesday the central bank has no room to consider government financing needs when setting interest rate policy. Speaking at a press conference following the FOMC meeting, Powell noted the Fed has a congressional mandate to control inflation while maintaining maximum employment. Given this statutory duty, "we don't take into account the federal government's fiscal needs. No central bank in any developed economy does that," adding such practice would also damage the Fed's credibility. The US government's interest payments last year totaled $1.1 trillion, with debt management costs more than doubling from pre-pandemic levels, largely due to the Fed's high-rate policy to curb inflation. Trump previously claimed a 3% rate cut could save the US $100 billion annually.

Fundamentals: (1) Supply-side disruptions: Tin ore supply is tightening in major production areas like Yunnan, with some smelters potentially maintaining maintenance shutdowns or minor production cuts in July (Bullish★). (2) Demand side: PV sector: Orders for PV tin bars in east China declined after the installation rush, with operating rates dropping at some producers; Electronics sector: End-users in south China entered the off-season, coupled with high tin prices, resulting in strong wait-and-see sentiment with orders limited to just-in-time procurement; Other sectors: Demand remained stable in areas like tinplate and chemicals without exceeding expectations.

Spot market: Spot transactions remained mediocre, with overall tin prices at relatively high levels. Downstream enterprises reported weaker-than-expected orders, maintaining just-in-time procurement strategies and prioritizing inventory usage in production.

[The information provided is for reference only. This article does not constitute direct investment advice. Clients should exercise caution in decision-making and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]