SMM Tin Market Morning Review (2013-3-28)

SHANGHAI, Mar. 28 (SMM) -- LME tin for delivery in three months opened at USD 23,030/mt and closed at USD 23,100/mt overnight, up by USD 55/mt from a day earlier, with the highest price at USD 23,100/mt and the lowest price at USD 22,575/mt. Daily trading volumes were 474 lots, up by 206 lots. Positions were 20,597 lots, up by 334 lots from a day earlier. LME tin inventories were down by 270 mt to 13,835 mt.

LME tin prices fell to hit USD 22,575/mt initially, but pared early losses later on better than expected economic sentiment index from euro zone on March. Finally, LME tin prices closed USD 55/mt higher to close at USD 23,100/mt overnight.

In the euro zone, the consumer confidence index for March was in line with market expectation. However, March’s economic sentiment index, service industry confidence index, corporation confidence index and industrial confidence index were all below market expectation. Germany’s April Gfk consumer confidence index was within market expectation. Italy sold EUR 6.91 billion bond on March 27th, near the upper limits. Yielding rate of Italy's 5-year government bond rose, but fell for 10-year government bond. Subscription rate of the two types of government bond, however, both fell due to investors’ concern over the country's political impasse. The euro plunged by 0.66% overnight, and cautious sentient grew in the market. In addition, Bank of England FPC released an announcement on March asking the Bank of England to raise GBP 25 billion.

U.S. pending home sales, a forward- looking indicator based on contract signings, slipped 0.4 percent to 104.8 in February from a revised 105.2 in January, though the February statistic remained the second highest level in nearly three years, the National Association of Realtors reported Wednesday. The consumer confidence index unexpectedly fell, which was mainly due to impact from the USD 85 billion government spending cut. Risk aversion sentiment pushed the US dollar to 83.17, the highest sine August 2012.

In China, non-performing loan from three major banks totaled RMB 225.91 billion in late 2012, up 2%, and were largely from manufactures from Yangtze River delta area, reflecting difficulties in domestic manufacturing sector. In addition, China’s central has tightened liquidity recently.

Close attention should be paid to US final GDP for Q4 and the US employment data for March. SMM expects that LME tin prices will meet resistance at USD 23,100/mt, and Shanghai tin spot prices will move between RMB 151,000-154,000/mt on Thursday.