SMM Morning Review - 2011/5/4 Tin Market

SHANGHAI, May. 4 (SMM) -- LME tin for delivery in three months opened at USD 32,125/mt and closed at USD 32,251/mt overnight, up by USD 151/mt from a day earlier, with the highest price at USD 32,350/mt and the lowest price at USD 31,700/mt. Daily trading volumes were 365 lots, up by 207 lots. Positions were 21,235 lots, up by 193 lots from a day earlier.  LME tin inventories were up by 225 mt to 20,795 mt.                                                      

LME base metals largely closed with gains on Tuesday and reversed upward trend, due to the weak US dollar and from support from upbeat data from the US manufacture and construction sectors. LME tin prices were relatively sluggish and hit a low of USD 31,700/mt during the Asian trading hours overnight, but were boosted at the tail of the trading and closed with slight gains to stand above USD 32,000/mt from upbeat US economic data.

According to data from the US Department of Commerce, the US factory orders for March grew by 3.0% to USD 462.91 billion, the fifth consecutive month growth in March, higher than previous estimation of 2.0%. The upbeat data from manufacture sector will support the US economy recovery. In addition, the US construction spending for March was up by 1.4% MoM, equaling to an annualized rate of USD 768.9 billion after conversion. The better-than-expected manufacturer data suggested prudent outlook of base metals.

According to data released from China on Sunday, the growth in China's manufacture sector slowed in April, suggesting that China's tight policy has taken effect. China’s PMI for April was 52.9, lower than previous estimation of 54.0.

Upward momentum of LME tin prices has weakened to certain extent recently, but support is still available at USD 32,000/mt mark. The steady growth in inventories will exert pressure on tin prices. SMM expects that LME tin prices will continue to fluctuate narrowly on Wednesday, and domestic tin prices will largely remain flat due to absence of strong upward momentum in LME tin prices.

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