SHANGHAI, Jun. 14 (SMM) -- LME tin for delivery in three months opened at USD 19,800/mt and closed at USD 19,500/mt overnight, down by USD 200/mt from a day earlier, with the highest price at USD 19,875/mt and the lowest price at USD 19,500/mt. Daily trading volumes were 194 lots, down 42 lots. Positions were 16,985 lots, up by 248 lots from a day earlier. LME tin inventories were down by 510 mt to 11,580 mt.
The Federal Reserve announced on Tuesday by a vote of 9 to 1 to keep interest rate unchanged between 0-0.25%, and reiterated to keep the ultra-low interest rate at least to mid-2013. Fitch Ratings adjusted credit outlook of four Eastern European countries from positive to stable, fueling risk aversion appetite. In response, the European and US equity markets slumped and the euro fell to 1.3 mark, while the US dollar advanced from risk aversion buying. In addition, Germany's chancellor, Angela Merkel, stressed that the upper limit of ESM rescue fund was EUR 500 billion, dashing the possibility that the limit will be raised. At present, global financial volatility cause global economy to face huge downward risk. Haunted by the European debt crisis and hit by US dollar advance, LME base metal prices closed with losses across the board on Tuesday. It is expected that Shanghai base metal prices will continue to vacillate on Wednesday.
The concern over the European debt crisis fueled risk aversion sentiment, boosting the US dollar and weighing down base metal prices. It is expected that LME tin prices will continue to fluctuate at low levels and may slip further, with support at USD 19,200/mt. In China’s domestic spot market, spot tin prices are expected to move in the RMB 159,000-164,000/mt range on Wednesday.