SMM Tin Market Morning Review (2013-2-28)

SHANGHAI, Feb. 28 (SMM) -- LME tin for delivery in three months opened at USD 23,350/mt and closed at USD 23,300/mt overnight, up by USD 75/mt from a day earlier, with the highest price at USD 23,675/mt and the lowest price at USD 23,300/mt. Daily trading volumes were 329 lots, up by 52 lots. Positions were 23,070 lots, up by 351 lots from a day earlier. LME tin inventories were 13,705 mt, unchanged from a day earlier.

During the Asian trading hours, LME tin prices moved relatively stale but met resistance at USD 23,400/mt. During the European trading hours, LME tin prices advanced to hit a high at USD 23,675/mt and finally closed at USD 23,475/mt, up USD 75/mt from a day earlier. Overnight economic announced from euro and the US were relatively positive, boosting market. However, uncertainties over Italian parliament election still linger.

Bernanke’s defense of the central bank's quantitative easing policy boosted the US equity market higher. Impasse on the Italian parliament election remained unimproved, as party leaders were reluctant for a second election.

Upbeat economic data were also major factors boosting the European and US equity market. UK's GDP for 4Q has revised from 0% to 0.3%, and February economic confidence from the euro zone was also better than market expectation. However, the US durable goods orders for January plunged by 5.2% MoM, the largest decline since August, despite 6.3% growth in airplane and non-defense capital goods. Nevertheless, the monthly rate and annualized rate of the US pending housing for January rose by 4.5% and 9.5% respectively, suggesting strong recovering in the US economy.

In domestic market, affected by China central bank’s repos operation, interbank lending rates and repo rate rallied. As of February 27th, the Shibor rose steadily to 3.932%.

Close attention should be paid to February employment data from Germany, and revised GDP for 4Q from the US. SMM expects that LME tin prices will aim USD 23,800/mt as next target, and Shanghai tins spot prices will move between RMB 155,500-158,000/mt on Thursday.