SHANGHAI, Feb.22 (SMM) -- LME tin for delivery in three months opened at USD 23,675/mt and closed at USD 23,180/mt overnight, down by USD 579/mt from a day earlier, with the highest price at USD 23,699/mt and the lowest price at USD 22,980/mt. Daily trading volumes were 808 lots, up by 337 lots. Positions were 22,243 lots, down by 475 lots from a day earlier. LME tin inventories were 13,515 mt, up 190 mt from a day earlier.
LME tin prices slipped to hit a low at USD 22,980/mt, and fell slower later to close at USD 23,180/mt, down USD 579/mt from a day earlier. Following release of Fed meeting minutes, risk aversion sentiment grew, sending the US dollar higher but weighing on base metal prices. In addition, the lower-than-expected PMI from the euro zone also dampened market sentiment and depressed transactions.
Economic data announced during the European and US trading hours were not positive. The US last week’s initial jobless claim surged by 21,000 to 362,000. The Philadelphia Fed manufacturing index for February deteriorated from -5.8 to -12.5. Coupled with Fed officials’ suggestion to reduce assets purchase, pessimistic sentiment dominated market. Finally, LME nickel prices closed at USD 16,750/mt, down USD 307/mt from a day earlier.
February’s PMI from the euro zone and Germany fell below market expectation. The euro zone initial composite PMI declined for the third consecutive month to 47.3. Initial composite PMI from Germany was 52.7, the lowest in two months, and initial composite PMI from France was only 42.3, the lowest in 47 months. Negative data renewed market concern over economic recovery, weighing down the euro versus the US dollar below 1.32.
The US Philadelphia Fed manufacturing for February was far below market expectation and hit an eight month low at -12.5. The initial manufacturing PMI for February was 55.2, below 55.5 expected and previous reading of 55.8. Last week’s initial jobless claim was 362,000, higher than 355,000 expected and reversing the declining trend in the previous two weeks. The growth in initial jobless claim reflected bumpy road of the US employment market. Affected by negative economic data from the US, the US stock market continued to fall overnight.
In China, the executive meetings of the State Council released five measures to tame real estate market, showing government’s strengthened efforts on curbing real estate market. This triggered decline in real estate stocks, dragging down the Shanghai Composite Index to record the largest decline in 15 months.
SMM expects that LME tin prices will fall to USD 22,620/mt if prices lose support at USD 23,160/mt and Shanghai spot tin prices will fall further to RMB 156,000-159,500/mt.