SMM Tin Market Morning Review (2013-2-8)

SHANGHAI, Feb. 8 (SMM) – LME tin prices started at USD 24,760/mt and fell to an intraday low of USD 24,700/mt during Asian trading hours overnight, but rose to a high of USD 24,980/mt during European trading session before falling back to finally close at USD 24,700/mt, down by USD 80/mt from a day earlier. Daily trading volumes were 268 lots, up 128 lots. Positions were 23,781 lots, down 76 lots from the previous trading day. LME tin inventories were 13,315 mt, up 40 mt from a day earlier.

The European Central Bank kept its interest rate unchanged at 0.75% on Thursday, within market expectation. The ECB Chief Draghi said later that the ECB will maintain easing policies. Besides, president of the Chicago Federal Reserve Bank Charles Evans said the Fed might end QE3 before unemployment rate falls below 7%. The Bank of England also remained interest rate unchanged at 0.5% and kept its asset purchase volume at GBP 375 billion. Spain sold EUR 4.61 billion of medium-to long-term bonds with yields up noticeably, while France sold EUR 7.98 billion of OAT with average yield also rising.

The German industrial output rose 0.3% MoM in December, above expectation, and the US initial jobless claims for the week ended February 2 were down to 366,000, a five-year low, indicating continued recovery in employment. Japan’s core machine order rose 2.8% MoM in December, well beyond expectation.

In China, the People’s Bank of China conducted RMB 410 billion of 14-day reverse repos, making PBOC’s total reverse repos for the week to hit a record high of RMB 860 billion. China’s CPI and PPI data for January will be released on Friday, market expects CPI to rise or edge down to 1.8%m with PPI expected to fall 1.8-1.5%.

The US dollar index ended above 80 overnight, while the Euro fell below the 1.34 mark. LME base metals continued a downward trend, while the European and US equities also slipped across the board.

On January 8, spot tin prices are expected to be between RMB 161,000-162,500/mt.