SMM Morning Review - 2011/8/19 Tin Market

SHANGHAI, Aug. 19 (SMM) -- LME tin for delivery in three months opened at USD 23,950/mt and closed at USD 22,800/mt overnight, down by USD 1,380/mt from a day earlier, with the highest price at USD 24,300/mt and the lowest price at USD 22,700/mt. Daily trading volumes were 452 lots, up by 165 lots. Positions were 20,338 lots, up by 98 lots from a day earlier. LME tin inventories were up by 225 mt to 23,235 mt.

On Thursday, LME tin prices were relatively stable during the Asian trading hours, but accelerated declines and hit a low of USD 22,800/mt during the European trading hours. Finally, LME tin prices closed at USD 22,800/mt, down by USD 1,380/mt or down by 5.7% from a day earlier. The US equity market plunged and base metal market was weighed after the US announced a series of disappointing economic data, including Philly Fed data, initial jobless claim and consumer price index.

August's manufacturing index in the US mid-Atlantic region was 30.7, lower than previous estimation of 3.7 and July’s 3.2. The initial jobless claim from the US in the week ending on August 13 was 408,000, higher than previous estimation of 400,000. July’s CPI was up by 0.5% MoM, higher than estimation of 0.2%. Deducting food and energy, July’s CPI was up by 0.2% MoM, largely in line with expectation.

In addition, Morgan Stanley cut global economic growth expectation for 2011 and 2012.

Base metal prices will continue to be affected by macro economic news. Amid current global financial turmoil, SMM expects base metal prices will continue to be weighed. LME tin prices opened at USD 22,655/mt on Friday. SMM expects LME tin prices are not likely to experience another slump and will find support at USD 22,000/mt on Friday. In the Shanghai tin spot market, cargo-holders’ confidence will be heavily dampened by overnight's LME tin price slump.