SMM Tin Market Morning Review (2012-10-26)

SHANGHAI, Oct. 26 (SMM) -- LME tin for delivery in three months opened at USD 20,350/mt and closed at USD 204,000/mt overnight, up by USD 25/mt from a day earlier, with the intraday high at USD 20,660/mt and the low at USD 20,285/mt. Daily trading volumes were 272 lots, up by 67 lots. Positions were 20,677 lots, down by 127 lots from a day earlier. LME tin inventories were down by 20 mt to 11,740 mt.

LME tin prices initially surged above 5-day moving average, but fell later to close at USD 20,400/mt.The US durable goods orders and home sales both improved. The Fed’s resolution to stimulate economic growth, and China’s economic data inspired market sentiment. What’s more, PT PT Timah expected that refined tin output would fall by 21%, supporting tin market.

LME base metal prices drifted lower overnight, as market sentiment was weighed down after S&P’s cut credit rating of Eurozone countries. International rating agency Standard & Poor’s adjusted credit rating of many French banks, alleging that French financial system was unable to stand high risks. However, a few Democracy Party members in Greece were against international aid plan and labor market reform plan, which added uncertainties of the Greek debt issue. Although the UK’s initial GDP for Q3 recorded the largest increase since Q3 2007, market concern over the Eurozone debt issue remained unchanged. Base metal movement shall depend on development of the European debt crisis. Since uncertainties over Spanish and Greece financing remain, global base metal prices shall still be weighed.

Close attention should be paid to GDP from the US. It is believed that PT Timah output cut will support tin prices. SMM expects that LME tin prices will test support at 60-day moving average, and meet resistance at 5-day moving average. In the Shanghai tin spot market, spot tin prices will move in the RMB 148,000-151,000/mt range on Friday.