SMM Tin Morning Brief for July 3, 2026:
On the 2nd, tin futures in the daytime session retreated after a rapid rise, closing as a "long upper shadow cross." The 2608 contract closed at 393,260 yuan/mt, down 910 yuan, or 0.23%. It opened at 392,360, hit a high of 401,860, and a low of 391,100, once breaking above the 400,000 level intraday before quickly giving back gains. The settlement price was 396,190, with trading volume at 261,022 lots and open interest at 39,663 lots, down 1,540 lots from the previous day, as funds continued to flow out. On the night of the 2nd, the night session consolidated narrowly. The most recent price of the 2608 contract was 394,060 yuan/mt, down slightly by 0.54%, tugging around the 391,000–398,000 range. The 2608 contract has firmly become the new most-traded contract (open interest 43,045 lots). LME three-month tin closed near $50,200/mt on the 2nd, with inventory falling another 50 mt to 8,525 mt (on-warrant 7,245 mt + canceled 1,280 mt), as the destocking trend continued but absolute levels remained low.
The biggest variable for early trading on the 3rd was the overnight nonfarm payrolls surprise: June nonfarm payrolls increased by only 57,000, far below the expected 113,000 and the previous 172,000. Traders pushed back the pricing for a US Fed rate hike from "October" to "December" — the marginal easing of the strong dollar logic provided a respite for tin's "low inventory + tight ore" floor narrative, but the Philadelphia Semiconductor Index's two-day plunge of 11% (down 6.27% on the 1st and another 5.44% on the 2nd, with SanDisk down 14%, KLA down 11%, Micron down 5%, and Tesla down 7%, its largest drop in a year) continued to weigh on the "AI solder" premium. The 3rd is the last trading day before the Independence Day holiday (US stock markets closed on Friday), and the futures are likely to consolidate with positions being reduced, with the 2608 contract seen in the 388,000–398,000 range.
Macro:
(1) The June nonfarm payrolls came in at a cold 57,000, pushing rate hike pricing from October to December. Far below the expected 113,000 and the prior 172,000, traders fully priced in a Fed rate hike in December, versus October previously — While Warsh's "price stability first" framework remains unchanged, the employment data gives more leeway for "data dependence," and the US dollar index pulled back from around 101.8 in Asian trading on the 3rd. The marginal easing of strong dollar pressure is the biggest positive variable for tin prices today. But it should be noted: PCE at 4.1% remains, and after Warsh removed forward guidance, a single month's data is not enough to reverse the hawkish tone; it's just that "the first half of July is slightly easier than late June."
(2) The Philadelphia Semiconductor Index was battered for two days, down 11%, dealing the heaviest blow to the "AI metal" narrative. Down 6.27% on the 1st, then another 5.44% on the 2nd, all 30 components fell across the board, with Teradyne down 13.63%, KLA down 11.51%, and SanDisk falling more than 24% over two days.
(3) Others: U.S. stocks diverged (Dow +1.14% to a new high, Nasdaq -0.8%), Apple +5% led the gains but couldn’t save the chip chain; Brent crude around 69, inflation “oil drop + PCE rise” divergence; offshore RMB 6.79, SHFE/LME price ratio protection marginally improved.
Fundamentals: (1) Supply side: The tin ore tightness pattern remains unresolved, but signals of marginal improvement are increasing. In June, most smelters focused on stable production. (2) Demand side: The traditional off-season effect deepened, with rigid demand support and high-price suppression coexisting. Downstream procurement stayed cautious, purchasing according to orders.
Spot market: On the 2nd, spot exhibited a pace of “SHFE surging to 400,000 but lacking follow-through buying strength, afternoon retracing yet price concessions still light,” marking two consecutive days of “prices without sales.” In the afternoon, futures fell back to close at 393,260, suppliers were forced to lower prices but still got no deals after the cuts, and downstream held a dual mentality of “fear of chasing highs + waiting for lows.”
[Data source statement: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and SMM’s internal database models, for reference only and do not constitute decision-making advice. The information provided is for reference only. This article does not constitute direct investment research decision advice. Clients should make prudent decisions and not use this as a substitute for their own independent judgment. Any decisions made by clients are not related to Shanghai Metals Market.]
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