SMM Tin Market Morning Review (2013-3-25)

SHANGHAI, Mar. 25 (SMM) -- LME tin for delivery in three months opened at USD 22,690/mt and closed at USD 22,940/mt last Friday, up by USD 290/mt from a day earlier, with the highest price at USD 22,940/mt and the lowest price at USD 22,595/mt. Daily trading volumes were 266 lots, down by 114 lots. Positions were 19,955 lots, up by 134 lots from a day earlier. LME tin inventories were 14,105 mt, up 55 mt from a day earlier.

LME tin prices advanced and closed USD 290/mt higher from a day earlier at USD 22,940/mt. During the European trading hours, market expectation over bailout agreement in Cyprus increased. Meanwhile, market concern over political condition in Italy also eased. These boosted base metal market.

LME tin prices largely fluctuated around 10-day moving average at USD 16,850/mt during the Asian trading hours due to absence of solid economic news. During the European trading hours, as market expectation over salvage agreement in Cyprus has increased, LME tin prices advanced to close at USD 17,122/mt, up USD 260/mt from a day earlier.

East concern over Cyprus crisis drove the Euro to rise sharply on March 23rd. Germany’s IFO business sentiment index for March was 106.7, lower than 107.8 expected and previous reading of 107.4, suggesting that the US economy was negatively affected external environment. In Italy, Bersani held a meeting with other parties focusing on reform. In response, the yielding rate of Italian’s 10-year government bond fell by 7.4 basis points to 4.503%. Fitch put UK’s AAA credit rating into observation, and will finish assessment over the US credit rating before late April. Generally speaking, negative impact from the euro zone is waning. In addition, economic data from the US were positive, suggesting that the US economy is recovering, boosting market sentiment.

In China, the Ministry of Finance revealed that China’s profits at state-owned companies rose by 9.7% YoY from March to February.

It is expected that development of Cyprus problem will be key factor affecting base metal price movement. SMM expects that LME tin prices will aim USD 23,100/mt as next target and Shanghai tin spot prices will move between RMB 150,500-153,500/mt on Monday.