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SMM Morning Review - 2011/12/15 Tin Market
Dec 15,2011 10:07CST
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Source:SMM
SMM expects that spot tin prices will move in the RMB 157,000-160,000/mt range on Thursday.

SHANGHAI, Dec. 15 (SMM) -- LME tin for delivery in three months opened at USD 19,500/mt and closed at USD 18,700/mt, down by USD 800/mt from a day earlier, with the highest price at USD 19,500/mt and the lowest price at USD 18,525/mt. Daily trading volumes were 346 lots, up 152 lots. Positions were 17,048 lots, up by 63 lots from a day earlier. LME tin inventories were up by 435 mt to 12,015 mt.

On Tuesday, Germany's chancellor, Angela Merkel, opposed the possibility that the upper limit of European Stability Mechanism (ESM) rescue fund will be raised, depressing euro zone market sentiment. Fitch Ratings cut the credit rating and economic growth forecast of four Eastern European countries, fueling market concerns over European debt crisis. Yesterday, the average yield of Italian 5-year government bonds reached 6.47%, hitting a euro-era high, while the yield of its 10-year government bonds climbed to 7.169%. In response, the Euro versus US dollar fell below 1.3000, and LME base metal prices declined as well. Fitch Ratings downgraded the debt ratings for five major European commercial banks this morning, which will continue to depress market confidence. 

LME tin prices fell continuously during Asian trading hours due to significantly falling Chinese stocks, and later fell below USD 19,000/mt during European trading hours, with prices finally closing at USD 18,700/mt, down USD 800/mt from a day earlier. The disappointing auction of Italian government bonds intensified market concerns over European debt crisis, and US dollar index climbed further. As a result, metal prices plummeted.

LME tin prices fell to near a 18-month low last night, and prices are expected to fall further to test USD 18,500/mt today, with support expected at USD 17,800/mt. In China’s domestic market, LME tin price decline yesterday will depress spot market sentiment, and SMM expects that spot tin prices will move in the RMB 157,000-160,000/mt range on Thursday.

 

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