SMM Morning Review - 2012/9/19 Tin Market

SHANGHAI, Sept. 19 (SMM) -- LME tin for delivery in three months opened at USD 21,600/mt and settled at USD 21,475/mt overnight, up by USD 125/mt from a day earlier, with the intraday high at USD 21,650/mt and the low at USD 21,150/mt. Daily trading volumes were 495 lots, down by 154 lots. Positions were 20,000 lots, down by 249 lots from a day earlier.LME tin inventories were 11,955 mt, unchanged from a day earlier.

Market absorbed positive impact brought by QE3 and shifted their focuses on global economic recovery and base metal demand outlook. The renewed debt crisis in Spain exerted downward pressure on base metal market. LME tin prices move stably during the Asian trading hours, but fell to hit a low at USD 21,150/mt during the European trading hours. Later, LME tin prices pared certain losses and settled at USD 21,475/mt, up USD 125/mt from a day earlier.

Eurogroup President Jean-Claude Junker said on Tuesday that very strict conditions will be set for Spanish bailout. Considering the strict conditions attached, Spanish government was hesitant on whether or not to receive financial aid. Spain's EUR 30 billion debts will be expired in October. It is expected that Spain may fail to repay the debts if it fails to receive financial aid. This triggered market concern over the European debt crisis, dampening risk appetite. In late trading hours, the US announced that the National Association of Home Builders home sales index for September was rising for the fifth consecutive months, the highest in six years, strong boosted market sentiment. Generally speaking, LME base metal prices largely moved stably in a cautious trend last night.

Close attention should be paid to the interest rate result from the Japan and the US new home starts data. SMM expects LME tin prices will find support at USD 21,000/mt and shanghai tin spot prices are expected to slip slightly to RMB 156,500-159,500/mt on Wednesday.