SHFE tin prices fluctuated at highs during the night session, while the spot market was suppressed with overall trading being sluggish. [SMM Tin Morning News]

September 26, 2025 SMM Tin Morning Briefing:

Futures: The most-traded SHFE tin contract (SN2511) fluctuated downward after opening in the night session before rebounding, closing at 273,400 yuan/mt, down 0.01% from the previous trading day.

Macro: (1) According to foreign media reports, Volkswagen is cutting production and introducing temporary shutdowns at two plants in Germany due to slower-than-expected growth in demand for its EVs. The plant in Zwickau will suspend production for one week starting October 6, which the plant spokesperson attributed to weak demand for the Audi Q4 e-tron. This car model is affected by US tariffs and Germany's push to relax the EU's ban on sales of new-type internal combustion engine vehicles. According to informed sources, the plant in Emden, which produces Volkswagen's ID.4 and ID.7 models, has reduced employee working hours and is expected to suspend production for several days. Both plants specialize in EV production, making them particularly sensitive to fluctuations in demand for battery-powered models. Although Volkswagen's EV sales in Europe have grown, the overall growth rate in the region is slower and more uneven than initially expected. Volkswagen also faces overcapacity issues. These two plants were part of a large-scale restructuring plan last year, in which labor leaders agreed to reduce plant costs and cut 35,000 jobs by the end of the decade to avoid plant closures. (2) During an institutional survey, QZ Technology stated that in H2 2025, for display driver IC packaging and testing business, the effects of display industry relocation continue to develop, especially for large-size COF and TDDI COG, coupled with the extension of national subsidies and events, demand increased rapidly in Q3 and is expected to see further growth in Q4; repairs and brand expectations for small-size TDDI are anticipated to increase; AMOLED penetration continues to rise. For non-display chip packaging and testing business, Cu bump is projected to see quarter-by-quarter growth in H2 2025; although DPS had poor capacity utilisation rate in H1 2025, it is expected to rebound in H2, maintaining an overall cautiously optimistic outlook. (3) US Fed — ① Logan called for reforming the interest rate benchmark, replacing the federal funds rate with the more efficient Tri-Party General Collateral Rate (TGCR), as the former's trading volume is about $100 billion/day versus the latter's $1 trillion/day. She described this as a technical adjustment and urged proactive reform. ② Bowman: The focus should now shift to employment rather than inflation. ③ Schmid: The more the balance sheet is reduced, the better. ④ Goolsbee: Expressed some unease about implementing excessive interest rate cuts prematurely based on slowing employment data and is still confirming whether inflation has peaked. ⑤ Cook warned the Supreme Court: If she is dismissed, the market would fall into "chaos."⑥ Daly: It is too risky to fully shift to a neutral stance.

Fundamentals: (1) Supply-side disruptions: Tin ore supply is tightening overall in major producing regions such as Yunnan. Some smelters remained under maintenance shutdowns in September (Bullish ★). (2) Demand side: The solder industry, which is the main consumer of tin, saw a significant decline in orders due to sluggish demand in the consumer electronics and home appliance markets. Downstream purchasing remains cautious, and high prices have clearly suppressed actual consumption. Limited boost from emerging sectors: Although the increase in AI computing power and growth in PV installations have driven some tin consumption, their current contribution remains small and insufficient to offset the decline in consumption from traditional sectors.

Spot market: Trading in the spot market remained sluggish yesterday. As tin prices rose, purchasing enthusiasm among downstream and end-user enterprises was dampened, with the vast majority opting to wait and see, suspending procurement activities. Most traders reported only single-digit transactions yesterday, while a few traders recorded transactions of around 20 mt.

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