SMM Tin Market Morning Review (2013-4-26)

SHANGHAI, Apr. 26 (SMM) - LME tin market overnight opened at USD 20,900/mt, with the highest and lowest level of USD 21,150/mt and USD 20,840/mt, respectively. Finally, LME tin market closed at USD 21,150/mt, up USD 380/mt from a day earlier.  Trading volumes were 479 lots, down 28 lots. Positions were 20,826 lots, up 288 lots. Inventories were down 125 mt to 14,120 mt.

 

LME tin market overnight moved higher and closed up USD 380/mt at USD 21,150/mt, mainly boosted by the positive US and UK economic results and market expectations over a possible cut in interest rate by European Central Bank (ECB). The record high of unemployment in Spain, however, highlights a gloomy outlook for demand in the region.  

 

Positive economic data from the US and UK overnight helped boost market sentiment. The preliminary UK 1Q GDP was 0.6%, well better than market expectations of 0.3%. After its earlier credit rating cuts by the Moody and Fitch Ratings, the UK released positive economic results, helping ease market concerns over economic growth, and sending the pound up significantly against the dollar. In the US, its latest initial jobless claims hit the lowest since the week ending March 9, down 16,000 from the previous data, also support equity market. 

 

After Portugal introduced economic stimulus measures, Italian’s new prime minister called for an easing of the austerity policies. Outlining a program of institutional reforms and measures to create employment, the new government has sent a strong message that a change of direction was needed. This has strengthened market expectations over easing measures in the Europe. Goldman Sachs said the ECB may cut its refinancing rate by 25 basis rates in interest rate meeting in May.  

 

In China, the Political Bureau of the Central Committee said yesterday that more efforts will be made in domestic demand improvement, cancel and decentralization of administrative examination and approval, strict control over expansion of high energy consumption and high-pollution industries, promoting industry transformation and upgrading, and the adjustment of industrial overcapacity. Yuan Xilu, Deputy Director of Planning Division under National Development and Reform Commission (NDRC), said the urbanization development plan is expected to be launched in the first half of the year. 

 

Markets now shift attention to interest rate decision by the Bank of Japan and the US 1Q GDP. SMM expects LME tin to keep moving up, and may test USD 21,800/mt. Still, mixed macro-economic news will continue to influence the market. In domestic spot tin market, cargo-holders’ unwillingness to move goods since the beginning of the week has helped support the market, with prices expected between RMB 143,000-145,000/mt on Friday.