U.S.-Iran conflict escalation intensifies sentiment divergence, the most-traded SHFE tin contract consolidated at highs in the morning [SMM Tin Midday Review]

Tin Midday Commentary, July 20, 2026

The most-traded SHFE tin contract opened at 402,000 yuan/mt, hit a high of 417,880 yuan/mt during the morning session, then consolidated at highs, closing the morning at 415,360 yuan/mt, up 1.65%. On the LME, three-month tin held narrow consolidation, currently at $53,550/mt, up 0.31%.

On the macro front:

(1) US media cited informed sources at the Pentagon as saying that as the US-Iran conflict continues to intensify, the US military has urgently drawn forces from bases in Germany and the UK, deploying additional F-16 fighter squadrons and F-35 stealth fighter wings to the Middle East, along with multiple aerial refueling tankers for support. The market is concerned about the risk of the regional conflict expanding, while the Pentagon has yet to officially confirm the deployment details. Meanwhile, Rezaei, a top military adviser to Iran's supreme leader, publicly warned that the previous US-Iran maritime memorandum of understanding has effectively lapsed. If the US continues cross-border airstrikes and maritime blockades, Iran will shift to a full offensive, all US military bases in the Middle East will be listed as legitimate targets for retaliation, and Strait of Hormuz shipping controls may be fully tightened.

(2) The Ministry of Finance, the General Administration of Customs, and the State Taxation Administration jointly announced that starting September 1, 2026, battery product consumption tax adjustments will be phased in: sodium-ion batteries, solid-state batteries, fuel cells, and PV-sector perovskite, tandem, and gallium arsenide cells will be fully exempt from consumption tax, supporting the development of new-type energy storage and frontier PV industries.

On the spot market, overall spot market trading was sluggish this morning. As absolute futures prices rallied again and broke above 415,000 yuan/mt, market feedback indicated that downstream enterprise inquiries fell noticeably. Only a handful of enterprises with inelastic demand made tentative low-price purchase orders during the morning, while large-scale firm orders lacked strength.

In summary, although the Middle East situation continues to intensify, current market fluctuations are not directly tied to immediate geopolitical headlines, instead tending to anchor on realized economic data. Recent mild US employment data and CPI and PPI figures that pulled back more than expected have eased the actual impact of inflation concerns. Although US Fed officials stated that the single-month CPI pullback is insufficient to declare the inflation fight over, the market is still driven by actual data, with the US dollar index's pullback preserving some upward momentum for the nonferrous metals sector. However, the repeated shifts in the geopolitical landscape have added risk and instability to the overall environment. The most-traded SHFE tin contract is expected to continue its pattern of wild swings within a range in the short term.