To The Moon

Futures market sentiment was lifted by gains in US stocks and the AI computing boom, with overnight LME tin closing up 2.6%. The latest settlement price was $58,280 per tonne, an increase of $1,475, representing a 2.6% gain. Trading volume was 993 lots, with open interest at 20.068 million lots. In the domestic market, the main Shanghai tin contract for July 2024 (2607) settled at 450,720 yuan per tonne during the night session, rising by 9,800 yuan, a gain of 2.22%.

According to the London Metal Exchange (LME), tin inventories stood at 8,845 tonnes on June 2nd, a decrease of 5 tonnes from the previous trading day.

Yangtze River Nonferrous Metals reports: Today, Shanghai tin futures opened higher across the board. The main July 2024 contract (2607) opened at 448,800 yuan per tonne, up 7,880 yuan from the previous day's close. As of 9:20 AM, the main July 2024 contract was quoted at 447,270 yuan per tonne, up 6,350 yuan, a gain of 1.44%. After the high open, Shanghai tin futures saw continued position reductions and a downward drift.

On the macro front, the US dollar index traded within a narrow range early on June 3rd, following a V-shaped rebound overnight that left it largely flat at the close. Expectations for the Federal Reserve to raise interest rates have intensified, with the US job market showing unexpected resilience. Officials have indicated readiness to take further rate hikes soon if inflation remains stubbornly high. Steadily rising US Treasury yields, coupled with escalating geopolitical risks in the Middle East, are jointly supporting a stronger dollar. High oil prices are exacerbating inflation concerns, further reinforcing the expectation that the Fed will maintain elevated interest rates, which directly pressures the valuation of US dollar-denominated industrial metals. The market is closely watching the upcoming US non-farm payrolls data on Friday and the progress of US-Iran negotiations, as these two events will determine the short-term direction for the dollar and metal markets.

Critical Situation Across the Tin Supply Chain

The global tin raw materials market is experiencing extreme divergence, with primary mine supply under sustained pressure. The resumption of mining operations in Myanmar's Wa State has fallen severely short of expectations. Compounding this, the approaching rainy season is set to limit open-pit mining and overland transport, further compressing tin ore output. A sudden public health incident in the Democratic Republic of Congo has led to the closure of a key port, disrupting the international flow of tin ore. Indonesia's plan to significantly increase the maximum royalty rate for tin ore will raise global mining costs and significantly enhance the bargaining power of mining companies.

Influenced by tight raw material supply, tin concentrate processing fees continue to decline, forcing most domestic smelters to maintain low operating rates. The supply of recycled tin raw materials remains stable, but its proportion is low, and it is constrained by recycling cycles and purification technology, making it difficult to compensate for the primary ore shortfall. The tight supply of upstream raw materials is now transmitting downstream, forming the core logic supporting tin prices at elevated levels.

Today's Key International Focus and Tin Price Forecast

Today's focus is on the US May ADP employment data, speeches from several Federal Reserve officials, and the latest developments in Indonesia's mining policies. In the short term, tin prices are expected to fluctuate within a high range of 447,000 to 451,000 yuan per tonne. The explosive demand from AI computing and supply-side disruptions remain the core supporting factors.