SMM Daily Review - 2012/3/6 Tin Market

[SMM afternoon comment on zinc in Shanghai: The market premium rose slightly, and the transaction was modest] On the whole, the transactions between traders are mainly dealt with the average price premium today. At the same time, affected by that, the market shipments with the market price decreased, and then some holders held up the price, so that the overall transaction was modest.

Total zinc inventories across seven Chinese markets stood at 119,600 mt as of September 10, down 2,500 mt from September 6 and 4,000 mt from September 3.

Spot premiums in Shanghai rose to 70 yuan/mt on February 18 from zero ahead of CNY due to costs during CNY holidays. However, spot premiums turned into wide discounts as of February 25 as SHFE copper prices surged, which stood at around 250 yuan/mt, a decline of nearly  460%. This signified that investors were selling aggressively to generate cash amid cash flow issues. Downstream inquiries were brisk but sellers refrained from lowering their quotes, with spot discounts stabilising between 150-140 yuan/mt.

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Buying was active in the aluminium physical market on Tuesday February 27 with narrowing spot discounts, SMM learned.

Mainstream products in Shanghai’s tin market were heard trading at 147,500-149,500 yuan/mt on Wednesday January 31, SMM learned.

As per SMM research, this week Shanghai inventories gain an obvious increase of about 10,000 tonnes.

In the short term, LME tin is estimated to fluctuate at the previous price range to look for direction, with support available at USD 20,400/mt.

Market sentiment was depressed after SHFE tin prices fell. A wait-and-see attitude grew in Shanghai spot tin market, SMM reported.

Net long positions on LME tin held by fund managers increased 19 to 1,260 lots in the week ended September 1, growing for 3 weeks in a row, according to LME report.