SHANGHAI, Jan. 16 (SMM) – LME tin price overnight opened at USD 24,850/mt, with the high end of the price range USD 24,999/mt, and finding support at USD 24,650/mt. Finally, LME nickel prices closed at USD 24,930/mt, up USD 275/mt. Trading volumes increased by 31 lots, to 307 lots, and total position decreased by 1,196 lots, to 22,898 lots. Inventories grew by 50 mt, to 12,750 mt.
Investors were concerned over US debt ceiling and the outlook of China's demand for metals. In this context, LME tin prices overnight rose after initially dropped during Asian trading, touching USD 24,999/mt. During European trading, LME tin prices fluctuated narrowly, surging to USD 24,990/mt at the end of trading, and finally closing at USD 24,930/mt, up USD 275/mt.
US December retail sales were up 0.5% MoM, better than the forecast, and reflecting strong consumer spending at the end of 2012. The growth of seasonally adjusted commercial inventories in November was 0.3%, with USD 1.62 trillion, and in line with expectations. US December PPI was down 0.2% MoM, larger than the forecast of 0.1%, showing low inflationary pressure and the US Federal Reserve still has room to push additional easing policies. Besides, January manufacturing index of New York Federal Reserve was -7.78, much lower than the expected 0.00. The manufacturing has been contracting for a sixth straight month due to the sharp slide of new orders and shipping index.
Statistisches Bundesamt shows Germany's economy in 4Q shrank 0.5% on a quarterly basis, the sharpest decline since the financial crisis. Impacted by European debt crisis, Germany is likely to go into recession. Germany's GDP was up 0.7% YoY in 2012, compared to the forecast of a 0.8% increase.
The World Bank lowered expectation for global economic growth in 2013 to 2.4%, compared to the previous 3%. The famous rating agency Fitch said ratings of US, UK, France and Spain will likely be downgraded. If the medium-term plan for spending cuts in the US lacks reliability, its rating will be lowered.
China's newly increased funds outstanding for foreign exchange in December totaled RMB 134.6 billion, with fiscal deposit decreased by RMB 1.1927 trillion. China's central bank implemented 14-day reverse repurchasing totaling RMB 10 billion on January 15 by interest rates bidding to further release liquidity.
US stocks were mixed. Standard & Poor's 500 index rose 1.66 points, while NYMEX crude oil prices closed down 0.9%, at USD 93.28/bbl. LME base metals prices generally dropped.
LME tin prices should meet resistance at USD 25,000/mt, and find support at USD 24,000/mt today. In China, with sluggish downstream demand, spot prices should remain between RMB 160,000-162,500/mt.