SMM Morning Review - 2011/12/29 Tin Market

SHANGHAI, Dec. 29 (SMM) -- LME tin for delivery in three months opened at USD 19,300/mt and closed at USD 19,000/mt overnight, down by USD 300/mt from a day earlier, with the highest price at USD 19,300/mt and the lowest price at USD 18,600/mt. Daily trading volumes were 249 lots, up by 59 lots. Positions were 15,670 lots, up by 198 lots from a day earlier. LME tin inventories were up by 45 mt to 11,880 mt.

The European Central Bank balance sheet recorded EUR 2.73 trillion on December 28th, a historical high, and the yields of Italy’s 10-year bond surged to 6.95%, near alert level. Market concerned that an auction of Italy’s10-year debt scheduled for Thursday wouldn't fare as well. Amid increasing risk aversion sentiment, the US dollar advanced to 80.73, near new high in 2011, weighing on LME base metal prices lower on December 28th.

LME tin prices were relatively stable during the Asian trading hours, but deepened declines and hit a low of USD 18,600/mt during the European trading hours overnight. Finally, LME tin prices erased certain losses and closed at USD 19,000/mt, down by USD 300/mt from a day earlier. The concern over the European was re-triggered again, and the US home price index for October was weaker than market expectation, dampening market sentiment and dragging down base metal prices.  

The renewed European debt crisis triggered market concern and weighed on market sentiment. It is expected that LME tin prices will continue to test support at USD 19,000/mt and will be supported at USD 18,500/mt. In domestic tin spot market, supply of low-priced goods was limited due to cargo-holders increasing unwillingness to move goods. SMM expects that spot tin prices will move stably in the RMB 158,000-159,500/mt range on Thursday.