SMM Tin Market Morning Review (2013-4-10)

SHANGHAI, Apr. 10 (SMM) - LME tin market overnight opened at USD 22,940/mt, with the highest and lowest level of USD 23,000/mt and USD 22,801/mt, respectively. Finally, LME tin market closed at USD 22,911/mt, down USD 39/mt from a day earlier. Trading volumes were 255 lots, up 29 lots. Positions were 20, 894 lots, down 77 lots. Inventories were up 35 mt to 14,450 mt.

LME tin market overnight fluctuated narrowly around USD 22,900/mt, neglecting the positive impact from the strike at Chile’s mine and a weak dollar. The release of a lower-than-expected China’s March CPI during Asian trading hours exerted a limited influence on the market. Finally, LME tin prices ended at USD 22,911/mt, down USD 39/mt from a day earlier.

China's major economic data overnight and annual earnings reports from US enterprises boosted market confidence. China's March PPI was down 1.9%, and CPI rose by 2.1%, with the increase lower than the 2.5% expected, which is due mainly to falling pork and vegetable prices. Market expectations that Chinese government will tighten liquidities thus decreased significantly. Besides, Alcoa reported its annual earnings grew by 59%, increasing optimism towards US stocks, while US February wholesales data and inventories data improved. As a result, the Dow Jones Industrial Average hit a new high, while the US dollar index dropped, with commodities mostly closing the day with gains.

European major economic data was mixed. UK February industry output grew 1.0% MoM, but was down 2.2% YoY, driving the pound. Germany's import value February was EUR 71.9 billion, down 3.8% MoM, and export value was EUR 88.7 billion, down 1.5% MoM. The sluggish import and export data shows Germany's domestic demand continued to weaken, and exportation was too poor to support its GDP growth.

In neighboring markets, the US dollar index was off 0.28 to 82.37, and European and US equities markets registered gains except German stock market. In LME metals market, all metals advanced across the board, with the exception of tin. 

On Wednesday, France and Italy will announce industrial production data for February, and the impact on the market is expected to be limited. SMM expects LME tin to hold in a tight price band, with strong resistance at USD 23,000/mt. Markets are waiting for minutes of the latest US Federal Reserve’s meeting, allowing tin prices to keep fluctuating in a narrow range. In domestic tin market, spot prices are expected to move between RMB 148,500-151,500/mt.