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SMM Morning Review - 2011/8/5 Tin Market
Aug 5,2011 10:11CST
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Source:SMM
In this context, any room for spot tin prices to fall further will be limited, and spot tin prices will move in the RMB 202,000-204,000/mt range on Friday.

SHANGHAI, Aug. 5 (SMM) -- LME tin for delivery in three months opened at USD 26,495/mt and closed at USD 25,725/mt overnight, down by USD 774/mt from a day earlier, with the highest price at USD 26,800/mt and the lowest price at USD 25,450/mt. Daily trading volumes were 571 lots, up by 46 lots. Positions were 19,822 lots, down by 45 lots from a day earlier. LME tin inventories were up by 65 mt to 21,685 mt.

LME tin prices were largely stable during the Asian trading hours, but tumbled during the European trading hours. At the tail of the trading, LME tin prices failed to pare losses and finally closed at USD 25,725/mt. Economic data announced from the US on Thursday were lower than expected, failing to ease market sentiment. Market concern over deterioration of European debt crisis intensified, reducing risk appetite and increasing risk aversion sentiment. In response, the US dollar surged to 75.366, and the US stock market tumbled. As of Wednesday, LME tin have been slipping for six consecutive days, down by 10%.

The European Central Bank decided to hold interest rate unchanged at 1.5%, ending a round of interest rate hike period which was started from April. The European Central Bank also provided a new around of capital to commercial banks, but still failing to ease market concern over expansion of the US debt crisis. Pessimistic statement from ECB president Trichet intensified market concern over economic growth in the euro zone. In this context, market tumbled and euro also slipped.

 According to data from the US, July’s retail sales rebound and last week’s initial jobless claim reduced, but these data still failed to ease bearish sentiment.

 Stock market reported largely scale sell-offs, with stocks in energy sector leading decline. Latest Dow Jones Industrial Average was 11,600 points, down by 300 points.

LME tin prices opened low at USD 25,400/mt, suggesting that market was dominated by short power. It is reported that market sentiment will remain cautious before the release of US non-farm employment data. It is expected that LME tin prices may face risks to fall further, and will find support at USD 25,000/mt. In the Shanghai tin spot market, steady decline of LME tin prices will drag down spot tin prices. However, supply of spot tin is reducing and availability of low-priced tin is also waning. In this context, any room for spot tin prices to fall further will be limited, and spot tin prices will move in the RMB 202,000-204,000/mt range on Friday.
 

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