Musa Alem stated that there is limited room for further interest rate cuts, and SHFE tin prices dropped back slightly. [SMM Tin Morning News]

SMM Tin Morning Brief on September 23, 2025:

Futures: The most-traded SHFE tin contract (SN2510) opened lower in the night session and fluctuated downward, closing at 270,600 yuan/mt, down 0.28% slightly from the previous trading day.

Macro: (1) On September 22, at the 2025 semi-annual performance meeting, Li Hui, Chairman and General Manager of Jingsheng Co., Ltd., analyzed the industry development prospects, stating that the silicon semiconductor industry has gradually completed destocking. Downstream chip manufacturers such as Hua Hong and SMIC are actively deploying new capacity. With the completion of the construction cycle, demand for materials will gradually be released. The PV industry is in a period of anti-involution adjustment. With the emergence of new downstream applications, the silicon carbide industry will gradually drive technological advancement and demand increase. (2) Cleveland Fed President Harker said on Monday that with inflation still above the US Fed's 2% target and remaining stubborn, the Fed needs to be "very cautious" in removing restrictive monetary policy. "I think we are only a short distance from the neutral rate, and if we remove this constraint on the economy, I worry it could overheat again." Harker, one of the most hawkish officials without a vote this year, did not explicitly state whether she supported last week's interest rate cut. She emphasized that inflation remains a major concern for her, and the job market is still close to the Fed's maximum employment goal. Harker expects the unemployment rate may rise slightly this year but decline again soon after. "On inflation, we are further from the target, a full percentage point away. And we have been off target for four and a half consecutive years, and are expected to continue to deviate in the coming years." (3) US Fed—①Bostic: There is not much reason to cut interest rates further now, expecting only one rate cut this year. ②Musalem: There is limited room for further rate cuts. Would not support further rate cuts if inflation risks increase. ③Milan: Believes the appropriate rate is in the middle range of 2%. Does not currently support adjusting the 2% inflation target. ④Harker: Should be very cautious in removing policy restrictions; my estimate of the neutral rate is among the higher ones.

Fundamentals: (1) Supply-side disruptions: Overall tin ore supply in major production areas such as Yunnan is tightening. Some smelters maintained shutdowns for maintenance in September (Bullish★). (2) Demand side: PV industry: After the installation rush, tin bar orders for PV in east China declined, and some producers saw lower operating rates. Electronics industry: Electronic end-users in south China entered the off-season, coupled with high tin prices, leading to strong wait-and-see sentiment among end-users, with orders only meeting essential needs. Other sectors: Demand in areas such as tinplate and chemicals remained stable, without exceeding expectations.

Spot Market: Trading in the spot market was relatively sluggish yesterday. As tin prices rose, most downstream and end-user enterprises chose to adopt a wait-and-see approach, with only a small number of companies maintaining just-in-time procurement. Most traders traded around 10 mt, while a few traders traded more than one truckload.

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