SMM Morning Review - 2011/8/22 Tin Market

SHANGHAI, Aug. 22 (SMM) -- LME tin for delivery in three months opened at USD 22,655/mt and closed at USD 22,800/mt on Friday night, unchanged from a day earlier, with the highest price at USD 23,300/mt and the lowest price at USD 22,550/mt. Daily trading volumes were 373 lots, down by 79 lots. Positions were 20,429 lots, up by 91 lots from a day earlier. LME tin inventories were up by 190 mt to 23,425 mt.

LME tin prices fluctuated narrowly around USD 23,000/mt last Friday, hitting a high of USD 23,300/mt and reaching the lowest of USD 22,550/mt, with prices finally closing flat from a day earlier. Weaker US dollar supported base metal prices to certain extent. However, trading sentiment was still dampened by investors’ concern over global economic recovery outlook, and risk aversion sentiment grew, forcing capitals to flow into gold and other safe-haven assets.

Investors’ concern over global economy and European debt crisis continued to dampen equity market last Friday, with the equities in the euro zone and the US closing with losses. Concern that the US, or even the global economy, may slip into another recession is growing in the market. Major financial institutions in the US cut economic growth forecast for 2012, fueling investors’ expectation that the Federal Reserve may launch QE3. In response, the US dollar closed with slightly losses.

As the euro zone still failed to implement an effective solution to solve the euro zone debt crisis, investors became more pessimistic towards the euro zone debt outlook, which prevented the euro from rebounding.

SMM expects that LME tin prices will continue to extend weak momentum, and shall find support at USD 22,000/mt on Monday.  Friday’s LME tin price performance will limitedly support spot tin prices. SMM expects that Shanghai tin spot prices will be largely stable, and will fluctuate in the RMB 193,500-196,500/mt range on Monday.