SMM Daily Review - 2012/8/20 Tin Market

SHANGHAI, Aug. 21 (SMM) – In Shanghai tin market, spot tin prices were mainly between RMB 141,000-142,000/mt on August 20 boosted by the rallied of LME tin prices. In the afternoon, many traders reported a lack of goods due to limited supply in the market. Transactions for Yunxi were made between RMB 141,500-142,000/mt, and Yunxiang was traded at RMB 141,500/mt. Goods from Jinlong and Nanshan fell short in the afternoon. Some buyers started purchasing at higher prices.

SMM’s survey indicated 60% market players expect tin prices will remain stable between RMB 141,000-142,000/mt this week. Since China’s domestic tin ore market remained modest, many cargo holders were unwilling to sell ore at low prices, limiting production at smelters. Besides, most smelters and traders believe the current tin prices are close to their cost lines after the continuous declines this year. In this context, tin prices will unlikely fall further. In addition, although tin demand downstream did not improve noticeably, transactions have been reported, so buyers and sellers may be in a stalemate.

30% investors believe tin prices should continue to drop this week to RMB 140,500-142,000/mt. According to SMM sources, orders at downstream enterprises did not pick up in July and enterprises only maintained low output. As such, downstream purchases will be restricted further should LME tin prices rally since buyers may be unwilling to buy at highs and it will be uncertain whether the rally can persist. The sluggish demand will drag prices down.

The remaining 10% investors expect tin prices to rebound to RMB 141,500-142,500/mt this week. LME tin prices tested USD 18,000/mt last week and opened higher on Monday, boosting market confidence, coupled with the persistent suspension at some tin enterprises in Indonesia, LME tin prices should gain certain support, and in turn, drive up China’s tin market. Sellers may hold prices firm on the optimism in the market, and lift spot tin prices.