SMM Morning Review – 2011/9/5 Tin Market

SHANGHAI, Sept. 5 (SMM) -- LME tin prices opened at USD 24,000/mt and closed at USD 24,102/mt on Friday night, down by USD 23/mt from a day earlier, with the highest price at USD 24,250/mt and the lowest price at USD 23,850/mt. Daily trading volumes were 190 lots, down 42 lots. Positions were 18,826 lots, down 42 lots. LME tin inventories were 22,430 mt, down 215 mt from a day earlier.

LME tin prices largely moved stable during the Asian and early European trading hours, and market was relatively cautious before release of the US non-farm payroll data. The most expected non-farm payroll data showed Friday that the unemployment rate kept unchanged, fueling market expectation that the US economy may slip into another recession. LME tin prices were weighed down to hit a low of USD 23,850/mt, with prices finally closing at USD 24,102/mt, down by USD 23/mt from a day earlier. 

The US non-farm employment data for August announced on last Friday was flat, the lowest since September 2010, and unemployment rate for August was unchanged at 9.1%. The weak employment data fueled market expectation that the US economy may slip into another recession. In this context, the equity markets in the Euro zone and the US fell sharply. Euro and other commodity currencies were weighed, while the US dollar closed with slight gains. Risk aversion sentiment pushed gold prices to advance by almost USD 50/mt, near historical high. Light crude for delivery in October at NYMEX fell by USD 2.48/ballel. 

The widely expected non-farm employment data was lower than market expectation, dampening market confidence to certain extent. Based on LME tin price performance, LME tin prices have moved narrowly around USD 24,000/mt, and shall continue to test sustainability at this level on Monday. In the Shanghai tin spot market, cargo-holders' bullish sentiment was dampened by short-term weak performance of LME tin prices. Coupled with impact from imported tin, SMM expects that spot tin prices will move in the RMB 195,500-197,000/mt range on Monday.