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SMM Morning Review - 2011/8/2 Tin Market
Aug 2,2011 09:52CST
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In this context, spot tin prices may fall in the short term, and spot tin prices will move in the RMB 204,500-206,500/mt range on Tuesday.

SHANGHAI, Aug. 2 (SMM) -- LME tin for delivery in three months opened at USD 28,300/mt and closed at USD 28,199/mt overnight, down by USD 181/mt from a day earlier, with the highest price at USD 28,840/mt and the lowest price at USD 27,900/mt. Daily trading volumes were 350 lots, up by 47 lots. Positions were 19,898 lots, up by 448 lots from a day earlier. LME tin inventories were down by 50 mt to 20,815 mt.

LME tin prices surged to hit a high of USD 28,840/mt, as market sentiment was boosted following the announcement that the US two political parties reached a consensus on raising debt limit, avoiding debt default. During the evening trading hours, LME tin prices were heavily weighed and closed USD 181/mt lower from growing concern over the weak demand following release of lower-than-expected manufacturing data from the US. In addition, stronger US dollar also weighed on LME tin prices.

The two political parties finally reached on consensus on raising the US debt limit and avoided a debt default before the deadline. In this context, market sentiment eased to certain extent, but stronger US weighed on base metal prices.

July’s PMI released on Monday indicated slower-than-expected growth in manufacturing activities in Asia and the Europe, and July’s PMI from the US also suggested slower-than-expected growth in manufacturing activities. According to data from ISM, July’s PMI from the US was 50.9, the lowest since July 2009. Market previous expectation was 54.9, and the previous reading was 55.3 in June.

Manufacturing data from the US triggered market concern. In addition, the eased US debt crisis sent the US dollar higher. In this context, base metal prices will be weighed. SMM expects that LME tin prices will remain fluctuation trend, and shall find support at USD 28,000/mt on Tuesday.  In the Shanghai tin spot market, players’ confidence was dampened by steady decline of LME tin prices. In addition, supply of goods from tin smelters in Jiangxi province increased. In this context, spot tin prices may fall in the short term, and spot tin prices will move in the RMB 204,500-206,500/mt range on Tuesday. 

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