SHFE Tin Holds Above 405000 Yuan on Tight Supply

Open interest slipped to 30,100 lots from 30,800, while the top seven bears trimmed positions more aggressively than the top seven longs, a sign that short sellers are backing away as prices climb. Trading volume remained heavy at 45,000 lots overnight after 100,500 lots in the day session, suggesting active participation rather than a thin squeeze.

The rally comes even as macro conditions are usually unfavorable for base metals. The Federal Reserve’s first rate hike in three and a half years has pushed U.S. Treasury yields to multiyear highs and kept the dollar strong, but tin is drawing support from constrained raw material flows and shrinking exchange stocks.

On the supply side, production recoveries in Myanmar’s Wa State remain only 40% to 50% of prior levels, while tin concentrate exports to China from Myanmar fell 27% from July. SHFE tin inventories also continue to fall, with stockpiles down 275 tons on Sept. 17 to 5,221 tons, even as China’s social inventory rose last week, showing the market is still balancing tight exchange supply against more comfortable downstream holdings.

Demand is not booming, which makes the price strength more notable. Solder operating rates were 72.8% in July, with electronics buyers still favoring just-in-time procurement during the off-season, but the market is finding support from persistent ore constraints and a modest global refined tin deficit reported by the World Bureau of Metal Statistics.

For investors, the immediate question is whether SHFE tin can hold above 405,000 yuan and extend toward 410,000 yuan, or whether the move fades back toward 400,000 yuan. A sustained break higher would reinforce the view that physical tightness is setting the tone for the market despite macro headwinds.