SHANGHAI, May 22 (SMM) - LME tin market overnight opened at USD 21,300/mt, with the highest and lowest level of USD 21,375/mt and USD 21,226/mt, respectively. Finally, LME tin market closed at USD 21,285/mt, down USD 15/mt from a day earlier. Trading volumes were 259 lots, down 165 lots. Positions were 21,448 lots, down 160 lots. Inventories were down 100 mt to 13,950 mt.       

LME tin market overnight fluctuated narrowly, and finally ended at USD 21,285/mt, down USD 15/mt from a day earlier. Market players generally stood on the sidelines before the US Federal Reserve Chairman Ben Bernanke’s testimony to Congress on Wednesday.

Two US Fed officials expressed support for continuation of easing policy, at odds with views of other officials two weeks ago. Bullard said there is no reason to scale back asset purchasing amid low inflation. Dudley said it is now early to discuss the exit of the program given the uncertainties remain for the US economy. Mixed opinions among Fed officials kept investors puzzled. The US dollar index stayed at high levels and closed up, putting downward pressure on base metal prices. Investors will seek clues from Bernanke’s testimony to the congress due tonight and the minutes of the latest policy meeting. 

Germany’s monthly report indicates optimism over the country’s economy in the second quarter. This is largely because factory orders have been upbeat and construction sector has begun to recover following negative impact from inclement weather earlier. Consumer Price Index (CPI) in the UK dipped to 2.4% in April, below expectations and previous reading. Discouraging figure suggests the country’s economy remains weak, but also leaves room for the Bank of England (BOE) to expand easing policy. The GBP against the USD tumbled to a new low in one and a half months at 1.5131 in the wake of disappointing CPI. A firmer US dollar weighed on base metal prices. The BOE will release the minutes of the monetary policy for May 8-9. The GBP will remain under downward pressure should the minutes send signal of further easing policy.     

China Customs data show that China imported 183,000 mt of refined copper in April, down 33% YoY and 16% MoM. With the Chinese government tightening control on property sector and with speculation in metal market being reined in, any immediate pickup in base metal demand should be impossible. Falling copper imports by China, the world’s largest copper consumer, rekindled concerns over demand in the world’s second largest economy, weighing down base metals.  

In other markets, the US dollar index gained a meager 0.003 point. European and US equities closed up across the board, whereas Asian stocks general closed down. LME base metals finished slightly down. 

The speech by Ben Bernanke and the release of latest minutes of interest rate meeting may send a clear signal to the market. LME tin market will meet resistance at USD 21,400/mt, and any message from Ben Bernanke’s speech will direct its short-term movements. In the domestic tin market, limited supply of goods will support the market, with prices expected between RMB 145,500-147,500/mt on Wednesday.