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SMM Morning Review - 2012/1/9 Tin Market
Jan 9,2012 09:55CST
smm insight
SMM expects that LME tin prices will largely move in the RMB 162,000-163,500/mt range on Monday.

SHANGHAI, Dec. 9 (SMM) -- LME tin for delivery in three months opened at USD 19,800/mt and closed at USD 19,825/mt last Friday, up by USD 25/mt from a day earlier, with the highest price at USD 20,000/mt and the lowest price at USD 19,600/mt. Daily trading volumes were 193 lots, down 71 lots. Positions were 15,960 lots, up by 388 lots from a day earlier. LME tin inventories were down by 25 mt to 11,335 mt.

Although last Friday’s US better-than-expected non-farm employment data boosted risk assets prices, the decline in the euro weighed on upbeat sentiment later. LME tin prices advanced slightly and hit a high of USD 20,000/mt last Friday. However, affected by pessimistic sentiment from the European debt crisis, LME tin prices finally closed at USD 19,825/mt, only up USD 25/mt from a day earlier.

Last Friday’s US non-farm employment data were better than market expectation, suggesting that US economy is recovering. Meanwhile, the stronger US dollar index also showed that the US dollar is increasingly supported by real economy recovery. If the US non-farm employment data continues to be improve, possibility for the Federal Reserve to cut QE3 will be even lower, which will lend upward momentum for the US dollar. In this context, base metal prices will be relatively weak. The European jitters remained in the market. Fitch cut Hungary’s sovereign credit rating into “BB+”, and put its outlook into negative. European banks’ deposit at the European Central Bank hit a new high of EUR 455.299 billion last Friday night, and Italy’s 10-year government bond yield returned above 7%. In addition, employment data and orders data were both lower than market expectation in the Europe, resulting in relatively pessimistic sentiment. Therefore, base metal prices fluctuated by positive economic data from the US and ongoing debt concern in the euro zone.

Market concern over the European economy exacerbated. It is expected that market transactions will remain cautious before outcome of China’s economic data, and LME tin prices will fluctuate narrowly, with resistance at USD 20,000/mt on Monday. In China’s domestic tin spot market, supply of goods priced below RMB 162,000/mt is limited and supply of spot tin is tight. In this context, SMM expects that LME tin prices will largely move in the RMB 162,000-163,500/mt range on Monday.


tin; tin price; LME tin price; spot tin price; European debt crisis; US dollar; euro; Jan. 9; in the Shanghai tin spot market;

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