SHANGHAI, Jun. 8 (SMM) – China announced an unexpected interest rate cut Thursday to stimulate demand, shoring up the market. However, the Federal Reserve Chairman Ben Bernanke’s remark later showed no sign of further easing policies. In response, LME tin prices opened at USD 19,750/mt in electronic trading overnight and hit a high of USD 20,050/mt to finally close at USD 19,800/mt, up USD 100/mt from the previous trading day, with the lowest price at USD 19,575/mt. Daily trading volumes were up 22 lots to 248 lots, while positions fell by 604 lots to 19,593 lots. LME tin inventories were down 545 mt to 12,310 mt.

LME base metals jumped since China announced to lower interest rates, but rolled back earlier gains as the Federal Reserve Chairman Ben Bernanke expressed no signal of any QE3 measures, promoting the US dollar index. Fitch’s downgrade of Spain’s credit rating also depressed metals. Base metals remained fluctuating recently, and may present a rally as the European debt issue tends to stabilize. However, market players will likely sell when metals rebounds given the current depressed economic prospects.

On Friday, China’s tin prices in  domestic market are expected to be RMB 151,500-153,000/mt.