Supply-Demand Tight Balance and Interest Rate Cut Expectations Resonate, SHFE Tin Futures Market Continues Overnight Strength Pattern [SMM Tin Midday Review]

During the afternoon session on December 4, 2025, the SHFE tin futures market continued its overnight strength. The most-traded contract, tin2601, fluctuated at highs during the session and closed at 318,790 yuan/mt at midday, up 9,450 yuan from the previous session's settlement price, a gain of 3.05%. This marks the fifth consecutive trading day the price has held above the key 300,000 yuan/mt level, reaching a new high since May 2022. Trading was active during the session, with noticeable capital inflows.

Internationally, tin prices on the London Metal Exchange (LME) also strengthened. The LME tin three-month futures contract surged 4.92% overnight, closing at $40,750/mt, after hitting a session high of $40,780/mt, with gains exceeding 4.4% at one point. The price spread between domestic and overseas markets remained stable, reflecting consistent sentiment regarding global supply chain tightness.

The current tin price rally is driven by both macro and fundamental factors. From a macro perspective, the US ADP employment report for November unexpectedly showed a decline of 32,000 jobs, the largest drop in two and a half years. This pushed market expectations for a December interest rate cut by the US Fed to nearly 90%, while the US dollar index fell to a low of 98.8, boosting dollar-denominated commodities broadly. Domestically, as the window for key policy meetings approaches, expectations for growth stabilization are heating up, supporting sentiment towards risk assets. On the supply and demand side, escalating geopolitical conflicts in eastern DRC continue to disrupt logistics routes and labor supply in mining areas. Slow progress in production resumptions at tin mines in Myanmar's Wa State, coupled with tightening export policies in Indonesia, further exacerbates multiple shocks to the global tin ore supply system. Demand side, the picture is mixed: demand from the semiconductor and AI industry chains provides solid support, but high tin prices are dampening restocking willingness in traditional sectors. Spot trades remain sluggish, characterized by high listed prices but thin actual transactions. Looking ahead to the afternoon session, the tight supply-demand balance and interest rate cut expectations are expected to continue supporting tin prices to hold up well. The intraday fluctuation range for the most-traded contract is projected between 313,000 yuan/mt and 323,000 yuan/mt.