SHANGHAI, Apr. 15 (SMM) - LME tin market last Friday opened at USD 22,850/mt, with the highest and lowest level of USD 22,986/mt and USD 21,925/mt, respectively. Finally, LME tin market closed at USD 21,975/mt, down USD 775/mt from a day earlier. Trading volumes were 809 lots, up 554 lots. Positions were 20,442 lots, down 289 lots. Inventories were up 15 mt to 14,480 mt.
The disappointing US economic data last Friday caused commodity market to tumble across the board. The University of Michigan Consumer Sentiment preliminary reading for April came in at 72.3, a hefty drop from the March final reading of 78.6, and well below market expectations of 78.5. As a result, gold and silver both slumped, a drop of over 5% and 6% respectively. LME tin slid to USD 22,000/mt, down 3.4%.
Due to falling gasoline sales, US March retail sales were USD 418.28 billion, down 0.4% from the previous month, but sales in restaurants, online stores and furniture stores increased. University of Michigan April CCI plummeted by 6.3 in March, to 72.3, the lowest last seen in July 2012. That is because of the sluggish job market in March, and uncertainties of US fiscal policies. The data maker pointed out that 32% people surveyed believe US unemployment rate will rise at the end of the year, up from current levels, while only 24% think the unemployment rate will fall noticeably. With regard to current US fiscal policies, only 9% believe they are satisfactory. Besides, US March PPI was -0.6%, also falling short of expectations and the previous month.
Euro zone finance minister meeting made great strides including successfully prolonging the deadline for Ireland and Portugal to pay their debt, an agreement on the banking sector union issue and a confirmation that Cyprus will receive bailout funds, pushing up the euro to 1.31. But the market barely gave any positive response to the news. On top of Cyprus selling gold assets, international spot gold prices plunged by nearly 5% last Friday, dipping to as low as USD 1,481/oz, with a weekly decline of 6%, the largest last seen in December 2,011. Falling commodity markets also caused Brent crude oil prices to plunge to a nine-month low of USD 101/bbl. The CFTC reported that net longs of the US dollar decreased by 4,766 lots, showing speculator optimism towards the US dollar weakened.
The central parity of the RMB against the US dollar was 6.2506 on April 12th, up 91 basis points from the previous trading day, and hitting a record high last seen on April 10th and since the foreign exchange reform in 2005, reflecting overseas capital is surging into China. According to latest data from the People's Bank, China's foreign exchange reserves increased by nearly USD 130 billion in Q1, a record quarterly high since Q2 2011, and forex receipt in financial institutions in February increased by RMB 295.43 billion. The State Council executive meeting decided to implement pilot projects of levying value added tax instead of business tax in the transportation industry and modern service industry across China, and will include railway transportation and post and telecommunication industries in the pilot projects soon.
The LME tin market will be dominated by a bearish sentiment after the disappointing US economic data dragged down LME tin prices. The dollar may regain upward momentum after a tumbling commodity market last Friday, and this will further add to downward pressures on metals market. LME tin prices will look for support at USD 21,800/mt. In the domestic tin market, prices will be negatively affected by tumbling LME tin prices, with prices expected between RMB 147,500-150,000/mt on Monday.