The most-traded SHFE tin contract hovered at highs during the night session, but as the situation in the DRC eased, tin prices may fluctuate downward. [SMM Tin Morning Brief]

SMM Tin Morning Brief on December 5, 2025:

Futures: The most-traded SHFE tin contract (SN2601) hovered at highs during the night session, closing at 320,070 yuan/mt, up 0.53% from the previous trading day.

Macro: (1) DRC President Felix Tshisekedi and Rwandan President Paul Kagame formally signed a peace agreement in Washington, D.C., US, on the 4th, aiming to end a 30-year conflict. The agreement was reached through mediation by multiple parties, including the US and Qatar. Before the signing, US President Donald Trump stated that the US would also sign bilateral agreements with the DRC and Rwanda that day, "opening new opportunities for the US to access critical minerals." (2) The total amount of sovereign debt issued by the US Treasury exceeded $30 trillion for the first time, more than doubling since 2018. Data released on Thursday showed that, as of November, the US government's outstanding Treasury bills, notes, and bonds totaled $30.2 trillion. This $30.2 trillion debt constitutes the main component of the US federal total debt. As of November, the US national debt reached $38.4 trillion, including obligations to the Social Security trust funds, savings bond holders, etc. According to the Securities Industry and Financial Markets Association, the US raised $4.3 trillion by issuing these three types of bonds in 2020, when the fiscal deficit exceeded $3 trillion. Although the deficit has narrowed since then (falling to about $1.78 trillion in fiscal year 2025), interest payments on the debt alone amounted to $1.2 trillion. Citigroup rates strategist Jason Williams noted, "The biggest challenge is interest expense. Even if tariff revenues reach $300-400 billion, it is still far less than the interest we pay on the existing debt. We are like in quicksand; tariffs might make us sink slower, but we are still sinking." (3) The Passenger Car Association released an analysis of suggestions for the 15th Five-Year Plan, indicating that the plan places greater emphasis on "effective quality improvement," meaning economic growth will be increasingly driven by increases in total factor productivity, a higher contribution from technological innovation, and the green and low-carbon transition. Measures such as expanding domestic demand and strengthening the domestic cycle are expected to push domestic auto sales beyond 35 million units during the 15th Five-Year Plan period, with the NEV penetration rate exceeding 70% and the widespread adoption of advanced intelligent driving.

Fundamentals: (1) Supply-side disruptions: Tin ore supply is tightening overall in major production areas like 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 remained cautious, with high prices significantly suppressing actual consumption. The boost from emerging sectors was limited: although the increase in AI computing power and the growth in PV installations drove some tin consumption, their current contribution scale remains small and insufficient to offset the decline in consumption from traditional sectors.

Spot market: Overall trading activity in the spot market was sluggish. While smelters showed a strong willingness to sell, traders largely halted purchases as they approached year-end account closures. Meanwhile, downstream and end-user enterprises maintained only just-in-time procurement, with most traders reporting only single-digit transactions yesterday.

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