SHANGHAI, Dec. 9 (SMM) -- LME tin for delivery in three months opened at USD 20,400/mt and closed at USD 20,100/mt overnight, down by USD 400/mt from a day earlier, with the highest price at USD 20,650/mt and the lowest price at USD 20,100/mt. Daily trading volumes were 227 lots, down by 108 lots. Positions were 16,278 lots, down by 457 lots from a day earlier. LME nickel inventories were down by 20 mt to 11,905 mt.
The European Central Bank (ECB) announced to cut December interest rate by 25 basis points from 12.5% to 1.00%, boosting the US dollar. Later the ECB chief Mario Draghi said economic outlook in the euro zone was not clear, further dampening market sentiment. In response, the European and US stock markets slumped, and LME base metal prices tumbled as well. China will announce a slew of economic data for November. Market widely expects that inflation index will fall significantly.
LME tin prices extended upward momentum for most of the time overnight and hit a high of USD 20,650/mt. During the evening trading hours, the European Central Bank announced to cut interest rate by 25 basis points to 1.00%. In addition, the ECB chief’s revealed that the ECB has no plan to further increase sovereign debt scale, which dampened market optimism towards the EU summit. In this context, the euro slipped, and LMT tin prices fell to close at USD 20,100/mt, down USD 400/mt from a day earlier.
It is expected that LME tin prices will continue to fluctuate before outcome of China’s CPI data and the EU summit, and will test support at USD 20,000/mt on Friday. In domestic tin spot market, spot tin prices are not expected to slip deeply as investors expect possible positive outcome from the EU summit. SMM expects that LME tin prices will move in the RMB 160,000-165,000/mt range on Friday.