On July 2nd, the domestic tin market led the non-ferrous metals sector against the broader trend. The Yangtze River spot 1# tin average price was reported at 395,250 yuan per ton, surging 4,500 yuan in a single day. The main Shanghai tin futures contract hit an intraday high of 401,860 yuan per ton, marking a gain of 0.35%.
Overnight, the US June ADP employment data unexpectedly fell short of forecasts. The US-Iran Doha talks heightened expectations for a looser crude oil supply outlook. Coupled with a hawkish stance from the Federal Reserve and a divergence in US tech stocks, global macro forces are locked in a more intense tug-of-war. Tin prices, leveraging their fundamental resilience, have carved out an independent recovery path, becoming a key market focus for the day.
Mixed Macro Signals and a Weaker Dollar Lift Valuations
The latest ADP employment figures, released by the ADP Research Institute in collaboration with the Stanford Digital Economy Lab, showed US private sector employment increased by only 98,000 in June, the smallest gain since March and below the market expectation of 118,000. Following the data release, the US Dollar Index faced short-term pressure and retreated, stabilizing above the 101 level in a high-range oscillation. This has provided a temporary easing of valuation pressures for non-ferrous metals priced in renminbi.
Although Federal Reserve Governor Waller has signaled a hawkish tilt, emphasizing that inflation remains elevated and refraining from providing forward policy guidance, the cooling employment signals have weakened the dollar's upward momentum. Concurrently, a sharp drop in oil prices has alleviated cost pressures for industrial commodities. As capital rotates away from high-flying tech sectors, tin is gaining favor for allocation due to its supply scarcity.
Tight Raw Material Supply and Strong Support from Low Inventory
Global constraints on tin raw material supply continue to manifest. Shipments from Myanmar, a major producer of cassiterite and tin concentrate, have slowed due to seasonal rains and mining policy constraints. Indonesia's tighter export quotas have resulted in actual shipments falling short of expectations. Incremental development from placer and stannite resources is limited. Recycled tin output lacks flexibility due to bottlenecks in electronic scrap recycling.
Domestically, raw material supply for smelters remains tight, making it difficult for refined tin production to see a significant increase. On the demand side, the expansion of AI computing infrastructure is sustaining resilient demand for semiconductor solder. Social inventories continue to hover at low levels, fostering strong reluctance to sell within the industry, which provides solid support for prices.
Non-Farm Payrolls Test Awaits, Short-Term Outlook Favors Volatile Strength
The US Non-Farm Payrolls data, set for release on the evening of July 2nd, represents the core pricing variable for global assets this week. Internationally, the focus is on the employment data and progress in US-Iran talks. Domestically, attention is on spot transaction activity and inventory changes.
If the Non-Farm Payrolls further confirms a cooling labor market, the US Dollar Index may continue its decline, potentially allowing tin prices to continue their upward push. If the data comes in stronger than expected, tin prices may revert to range-bound consolidation. In the short term, support around the 390,000 yuan level appears solid, with resistance near 405,000 yuan. The overall outlook maintains a pattern of volatile strength. Strategically, it is advisable to monitor the guidance from the Non-Farm Payrolls data and focus on buying on dips.
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