The most-traded SHFE tin contract fluctuated rangebound during the night session, with high prices significantly dampening spot tin purchases. [SMM Tin Morning Brief]

SMM Tin Morning Brief on December 1, 2025:

Futures: The most-traded SHFE tin contract (SN2601) fluctuated rangebound during the night session, holding firmly above the 300,000-yuan mark and closing at 305,980 yuan/mt, up 1.49% from the previous trading day.

Macro: (1) The Beijing Municipal Science and Technology Commission and the Administrative Committee of Zhongguancun Science Park released the Beijing Artificial Intelligence Industry White Paper (2025). The white paper predicts that various AI agents capable of serving as personal assistants, enterprise process automation tools, and scientific research assistants will experience explosive growth. The development of embodied AI will achieve a leap from information processing to physical operations. The white paper analyzes future trends in the artificial intelligence industry: various AI agents capable of acting as personal assistants, enterprise process automation tools, and scientific research assistants will see explosive growth. The development of embodied AI will achieve a transition from information processing to physical operations. Artificial intelligence will expand the boundaries of cognitive capabilities. World models will significantly enhance the generalization ability and reliability of AI systems. The advancement of "AI for Science" will accelerate the process of scientific discovery and is expected to drive a series of breakthroughs across various fields. Artificial intelligence will promote the inclusive development of technology. Edge intelligence will create new blue oceans for applications, with edge devices such as smartphones, personal computers, and smart vehicles possessing stronger intelligent processing capabilities. (2) TSMC is establishing two CoWoS advanced packaging plants in Chiayi. Although multiple safety incidents previously caused work stoppages at the site, only some work areas were affected, with a relatively small impact on progress. It is reported that the second plant is currently undergoing installation and testing and is expected to begin mass production next year, while the first plant is scheduled for installation next year and mass production the following year. It is understood that the company plans to expand the site with approximately six additional 3D advanced packaging plants in the future. (3) On November 27 local time, Nexperia in the Netherlands issued an open letter to the leadership of Nexperia China, stating that multiple direct communications through regular channels with Nexperia China had been ineffective. The letter calls on Nexperia China's leadership to respond promptly, engage in dialogue constructively, focus on restoring the supply chain, and ensure alignment with corporate governance and compliance with legitimate directives from Nexperia's global management in the next steps.

Fundamentals: (1) Supply-side disruptions: Tin ore supply is tightening overall in major production areas such as Yunnan. Most smelters are expected to maintain relatively stable production in December. (2) Demand side: Orders have decreased significantly due to weak demand in the consumer electronics and home appliance markets. Downstream procurement remains cautious, and high prices are noticeably suppressing actual consumption. Limited boost from emerging sectors: Although increased AI computing power and growth in PV installations have driven some tin consumption, their current contribution remains relatively small and insufficient to offset the decline in consumption from traditional sectors.

Spot market: Tin prices showed a pattern of rising first then falling last week. In the early part of the week, prices surged significantly driven by supply concerns, but later experienced a slight correction as bulls took profits. At the beginning of the week, tin prices fluctuated at highs supported by the tight supply situation, but acceptance of high prices in the spot market was limited, resulting in sluggish trading. Subsequently, due to a sudden deterioration in the security situation at mines in the DRC raising concerns about supply disruptions, coupled with factors such as tightened export regulations in Indonesia and slow production resumptions in Myanmar, market sentiment shifted towards a "supply contraction" logic, driving futures prices to strengthen significantly mid-week. The most-traded SHFE tin contract rose to 304,970 yuan/mt on November 27. However, after the price spike, a clear "fear of highs" sentiment emerged in the spot market, dampening downstream purchase willingness. Traders reported almost no market transactions, with only sporadic just-in-time procurement, resulting in very sluggish overall trading. Approaching the weekend, some bullish funds chose to take profits, leading to a decrease in open interest. SHFE tin prices came under pressure and pulled back, with the most-traded contract dropping slightly to around 300,100 yuan/mt and fluctuating on November 28. Overall, the tin market last week displayed a divergence between futures price increases driven by supply-side concerns and weak actual demand in the spot market. The inhibitory effect of high prices on spot purchases was significant, and wait-and-see sentiment was prevalent in the market.

[Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and relying on SMM's internal database model, and are for reference only, not constituting decision-making suggestions. The information provided is for reference only. This article does not constitute direct investment research decision-making advice. Clients should make decisions cautiously and not use this to replace independent judgment. Any decisions made by clients are unrelated to SMM.]