In the futures market, heightened trade friction amid U.S. tariff expectations led to mixed performance in U.S. stocks, with overnight LME tin closing down by 2.24%. The latest settlement price was $55,950 per tonne, a drop of $1,280, representing a 2.24% decline. Trading volume stood at 798 lots, with open interest at 20,801 lots. In the domestic market, the overnight session for the main Shanghai tin contract 2607 settled at 432,200 yuan per tonne, falling by 9,250 yuan, a decrease of 2.1%.
LME tin inventories on June 4 were 8,760 tonnes, a reduction of 40 tonnes compared to the previous trading day.
According to a market update, Shanghai tin futures opened lower across the board today. The main month contract 2607 opened at 433,040 yuan per tonne, down 8,410 yuan from the previous day's close. At 9:05, the Shanghai tin main contract 2607 was quoted at 426,350 yuan per tonne, a sharp decline of 15,100 yuan, or 3.42%. Shanghai tin futures opened weak and continued to trend lower, with the market maintaining a pattern of weak volatility. Weakening international oil prices contributed to a divergence in U.S. stock indices, with the Dow Jones hitting a new record high while the semiconductor sector experienced profit-taking pullbacks. Influenced by combined domestic and international macroeconomic disturbances, LME tin, after three consecutive days of gains, saw a significant retreat. Stronger-than-expected overseas employment data has tightened expectations for Federal Reserve rate cuts. Coupled with accumulated gains in tin prices prompting a concentration of long positions taking profits, multiple bearish factors converged to drag London tin prices sharply lower. A slightly fluctuating U.S. dollar and an imbalanced performance across U.S. stock sectors further amplified volatility in the non-ferrous metals market.
Current State of the Tin Industry Chain
The tin industry chain is characterized by a tight balance upstream and diverging demand downstream. On the supply side, global raw material supply continues to tighten. The resumption of tin mining in Myanmar has fallen short of expectations, with the rainy season hampering extraction and transportation. Indonesia's proposed tax increases are set to raise costs, while the closure of a Congolese port is impacting exports. Recycled tin is insufficient to fill the gap from primary ore shortages. On the smelting side, processing fees remain low, leading to underutilized capacity and a decline in refined tin output. On the demand side, AI-related solder demand is surging, but traditional electronic solder demand has entered a seasonal lull. High prices are discouraging inventory restocking, and demand from the photovoltaic sector has underperformed expectations.
Key Variables and Short-Term Outlook Approaching the Weekend
Market focus today will center on the release of U.S. May non-farm payroll data in the evening. If the data again exceeds expectations, anticipation of Federal Reserve interest rate hikes could intensify, potentially putting further pressure on tin prices. In the short term, the previous substantial rise in tin prices has led to concentrated profit-taking by long positions. Downstream buyers' reluctance to restock at elevated prices suggests room for further price correction. However, in the medium to long term, the global tight supply-demand balance for tin remains unchanged, with long-term AI computing demand supporting a gradual upward shift in tin's price floor. It is anticipated that the core trading range for the main Shanghai tin contract today will be between 422,000 and 435,000 yuan per tonne. The recommended strategy is to adopt a wait-and-see approach, looking for opportunities to go long after the market stabilizes following the current pullback.
Comments