Inventories in and outside China declining in tandem, the most-traded SHFE tin contract eyes the 410,000 mark [SMM Tin Morning Report]

July 20, 2026 SMM Tin Morning Brief:

LME: LME three-month tin closed at $53,385/mt on July 17 (Friday), up 0.43%, up 0.49% WoW, and ranged narrowly between $53,100 and $53,800 during the session. LME tin inventory fell 405 mt to 7,595 mt, with the decline continuing and remaining historically low.
China: The most-traded SHFE tin contract surged to 415,030 yuan/mt, up 1.57%, with open interest increasing by 884 lots; open interest in the most-traded contract reached 34,100 lots.

Macro:

(1) Hawkish Waller comments + Middle East tensions drove sharp swings in July rate hike probabilities. US Fed Governor Waller stated in the early hours of July 20 that “if core inflation heats up again, tightening will be needed in the near term.” CME probabilities for a July rate hike moved from 34% on Sunday to 46.5%, but another measure cooled to 14% after June CPI fell 0.4% MoM, while year-end pricing still bets on “one hike of about 30bp before December.” The US dollar index at 101.30 (closed at 100.76 on July 17, down 0.2% WoW, but rebounded in Asian morning after the hawkish comments), Brent breaking above $83, and Hormuz disruptions → the “inflation → interest rate → US dollar” chain is pressuring the zero-yield attributes of non-ferrous metals.
(2) Aftershocks from the Philadelphia semiconductor index + AI capex concerns linger. The Nasdaq fell 2.9% WoW, chip stocks underwent a concentrated correction, and the “capex rollback” narrative triggered by Meta leasing computing power is still being priced in. Tin’s “AI solder alpha” narrative is capped on the upside, but the bottom is supported by tight ore, forming a “capped above, supported below” pattern.
(3) China’s June aggregate financing stock grew 7.4% YoY and consumer retail sales rose 1.0% YoY, with the data proving mediocre, leaving SHFE guidance dependent on industrial fundamentals.

Fundamentals:

(1) Supply: The Wa State rainy season is winding down + TCs have been raised, leading to marginally easing but still constrained conditions. Tin concentrate TCs were raised by 500 yuan/mt, with a cumulative increase of 1,750 yuan/mt , reflecting phased ore supplementation easing smelting pressure. The Wa State rainy season (May-July) is ending, and the production resumption pace has started, but full-year output is still only 40-50% of pre-ban levels , with a full resumption delayed to 2027. Whether volumes can ramp up to 1,800 mt/month metal content after August is a key variable. Indonesia’s June refined tin exports stood at 2,995 mt, up 5.09% MoM but down 32.55% YoY , with January–June cumulative exports at 18,715 mt, down 25% YoY. The theme of halved exports remains unchanged.

(2) Demand: The off-season is deepening, but AI + semiconductors provide a floor. July is the traditional off-season for PV welding strip and consumer electronics, with downstream players staying cautious amid high prices. Stockpiling for new Apple/Huawei devices from late August onward will be the next demand trigger.

Spot market: Last week exhibited a “retreat after rapid rise, struggle to catch up” pattern. Although spot premiums remained firm, downstream solder enterprises largely stayed on the sidelines, conducting only small-scale purchases for immediate needs.

[Data Source Statement: All data other than publicly available information are based on public data, market communication, and SMM’s internal database models, processed by SMM, and are for reference only, not constituting any decision-making advice. The information provided is for reference only. This article does not constitute a direct suggestion for investment research decisions; clients should make decisions prudently and not substitute this for their own independent judgment. Any decisions made by clients have nothing to do with Shanghai Metals Market.]