SHANGHAI, Apr. 18 (SMM) - LME tin market overnight opened at USD 21,238/mt, with the highest and lowest level of USD 21,250/mt and USD 20,375/mt, respectively. Finally, LME tin market closed at USD 20,475/mt, down USD 735/mt from a day earlier. Trading volumes were 569 lots, up 32 lots. Positions were 20,761 lots, up 17 lots. Inventories were down 45 mt to 14625 mt.
Plagued by major negative news, LME tin market overnight tumbled again, down as low as USD 20,375/mt before finally closing at USD 20,475/mt, down 3.47%. The news that the European Central Bank (ECB) may reduce interest rate if the condition continues to deteriorate, coupled with the weaker-than-expected employment data in the UK weighed down the euro and undermined market sentiment. On April 17, Bundesbank's chief Jens Weidmann, also a member of the ECB Governing Council, said the ECB may cut interest rates if the condition in the region deteriorates further. In response to his remarks, the global risky assets market slid again after a brief rebound, and the euro was down over 1%. This, coupled with Germany’s credit rating cuts by Egan-Jones, further dampened market sentiment. Besides, the new finance minister of Cyprus Harris Georgiades said the country will sell parts of its gold reserves during the next months, and its central bank will hammer out a sales plan at an appropriate time.
In the US, the latest Beige Book shows that economic growth was recovering at a mild pace from late February to early April. The growth was driven by improved manufacturing activities, especially in construction and automobile sectors, housing prices, and increases in consumer spending. The growth of consumption spending, however, was also capped by rising gasoline prices and tax increases on income, helping the dollar up 1.02%.
In China, the Executive Meeting of the State Council held April 17 points that while continuing the positive fiscal policy and steady monetary policy, China will accelerate to expand domestic demand, take precautionary measures over risks from local government debt or credit, more efforts to cancel and modify administrative examination and approval items, deepen the reform on fiscal and taxation system, promote market-directed interest rate reform, and the yuan's capital account convertibility. The same day, the yuan on April 17 hit a record high against the dollar for a fourth consecutive day.
In other news, the IMF cut the global economic growth for 2013 and 2014, down 0.2% to 3.3% for 2013. Market focus is now shifted to the G20 Financial Minister Summit in Washington. Discussion over monetary policy will likely dominate the meeting, and the dollar may advance further.
UK retails data and the US employment data will be released today. Dominated by a bearish sentiment, LME tin market is expected to keep falling, with support expected at USD 19,500/mt. In the domestic tin market, prices will be weighed down by slumping LME tin prices, with prices expected between RMB 141,000-144,000/mt on Thursday.