ISM 55.6 Reinforces September Rate Hike, SHFE Tin Price Sees Intensified Tug-of-War at Highs [SMM Tin Morning Brief]

Futures
LME: The LME 3-month tin electronic trading session on August 3 closed at $55,365/mt, up 0.18%, with a high of 55,650 and a low of 54,900; as nickel, zinc, and lead broadly pulled back, tin alone closed higher, continuing to lead base metals.
China (Aug 3 daytime session → night session): SHFE tin 2609 daytime session closed at 426,750 yuan/mt, up 0.63%, with an intraday high of 428,770 and low of 423,150, volume of 201,819 lots, and open interest of 56,940 lots (+270). The daytime session saw a net capital inflow of approximately 167 million yuan. In the night session (Aug 4, 01:00), the 2609 contract closed at 428,040 yuan/mt, up 0.44%, with a high of 429,150 and a low of 422,500, and open interest rose to 58,378 lots. The night session opened lower and then quickly rebounded, returning to above the daytime session's close.
Aug 4 early session opening reference: The 2609 contract is expected to open between 427,500 and 429,500 yuan/mt. 428,000 will be a new short-term resistance, while 423,000 (the night session's average price area) will turn into support on pullback; if the early session fails to hold above 428,000, be cautious of profit-taking at highs.

Macro: ISM 55.6 hits a four-year high; September rate hike probability swung back to 60%–63%
(1) The US July ISM manufacturing PMI came in at 55.6, far exceeding the expected 53.9 and the prior 53.8. Production was 58.5, new orders 56.7, and employment 52.8 (the first expansion since September 2023), the highest since May 2022. However, the price index only pulled back slightly to 71.1, remaining elevated for 22 consecutive months, with nearly three-quarters of enterprises still reporting price increases.
Market repricing: After last week's FOMC 9:3 hold, the September rate hike probability had pulled back to 58%, but following the stronger-than-expected ISM, CME FedWatch pushed the September rate hike probability back to the 60%–63% range. The "strong economy + high prices" combination provides even firmer support for Warsh's hawkish stance, serving as a medium-term headwind for non-yielding assets like tin.
(2) The US-Iran "Hormuz Deal" seesaw: Trump stated that negotiations with Iran would take place on the 3rd and that the strait would be reopened, but Iran denied any direct talks and insisted on "no full reopening while the war continues." The strait remains de facto semi-blocked—the geopolitical risk premium has pulled back from "extreme tension" but not been removed, and oil prices around $91/barrel leave a tail risk of a secondary inflation push.
(3) A-share tech under pressure, US tech rebound divergence: On Aug 3, South Korea's SK Hynix fell 8.73% and Samsung -9%; A-share Shenwan Semiconductor dropped 5.84% and GigaDevice hit its limit down. However, in the US night session, Nvidia rose 2.93% and Google gained 4.88%, returning to a $5 trillion market cap. This cross-timezone scissors gap in the AI computing power chain means that tin's "solder alpha" is not dictated by domestic semiconductor sentiment in the short term, and overseas AI capex remains the anchor for marginal growth.
Fundamentals: Yinman mining and beneficiation fully halted + Wa State’s slow production resumption, supply elasticity continues to be trimmed
(1) New hard reduction in China: Yinman Mining’s mining and beneficiation completely stopped. On July 26, an underground accident at Yinman Mining caused one fatality; on July 28, the mining area was suspended, and on July 30, the Xiwuzhumuqin Banner Emergency Management Bureau issued an additional “Decision Letter” requiring the beneficiation and tailings systems to be suspended simultaneously, bringing all mining and beneficiation operations to a standstill.
(2) Smelting and demand: TC for 40% tin concentrates in Yunnan remains at historical lows; refined tin operating rates in Yunnan are around 80%, and in Jiangxi at a low 32–35%. Refined tin production in China fell MoM in July, and after the Yinman halt, August production has room for further downward revision. On the demand side, stockpiling for new Apple/Huawei models in late August has not yet begun; AI servers + advanced packaging provide a full-year marginal increase of 12,000–15,000 mt, accounting for 3–4% of global consumption, acting as an amplifier for a “small variety, high elasticity” metal.

Spot market (Aug 3 recap)
Transactions: High-level trading was subdued. Futures strength drove traders to hold prices firm, with premiums for major brands such as Yunnan Tin staying high; however, solder and alloy enterprises only maintained small-volume hand-to-mouth purchases, showing weak willingness to chase higher prices. Transactions were concentrated in intermediate trader turnover, with strong wait-and-see sentiment among upstream and downstream players.
Aug 4 morning spot estimate: Opening at 427,500–430,000 yuan/mt. If the 2609 contract stabilizes above 428,000 in early trading, traders’ reluctance to sell will push premiums up from the current central level of around +1,300 yuan/mt. Above 429,000, solder plants essentially place no orders; the 413,000–415,000 range is where downstream is willing to back-price — the high-level stagnation pattern of “futures hit new highs, spot follows but trading is thin” continues.

[Data Source Statement: Except for publicly available information, all other data are derived from public information, market communication, and SMM’s internal database model, processed by SMM. This information is for reference only and does not constitute investment advice. The information provided is for informational purposes only. This article does not constitute a direct recommendation for investment or research decisions. Clients should make prudent decisions and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to Shanghai Metals Market.]