SHANGHAI, May 31 (SMM) – LME tin price overnight opened at USD 20,900/mt, with the high end of the price range USD 21,084/mt, and finding support at USD 20,850/mt. Finally, LME tin prices closed at USD 21,001/mt, up USD 71/mt. Trading volumes decreased by 30 lots, to 149 lots, and total position decreased by 234 lots, to 20,546 lots. Inventories remained flat at 13,875 mt.

US data mostly fell short of expectations, weighing down the US dollar index around 83, giving support to base metals prices. But LME tin remained weak.

According to the US Department of Labor, initial jobless claims in the US rose 10,000 to 354,000 in the week ended May 25, higher than the 340,000 forecast. The figure in the week ended May 18 was revised upwardly from 340,000 to 344,000. The unexpected rise in initial jobless claims is a sign of worsening labor market in the US, turning investors bearish over non-farm payrolls to be released June 7. The US Department of Commerce revised the US Q1 GDP to an annualized 2.4 growth, down slightly from the earlier estimate. This is due mainly to government's spending cut plan. Slower inventory growth in sectors other than agriculture also dragged down the country's economic growth. The Personal Consumption Expenditure (PCE) was revised up to a 1.0% growth in the first quarter, above the 0.9% forecast.   

On May 30, German Chancellor Angela Dorothea Merkel met with French President Hollande to discuss ways to improve competitiveness in the euro zone, bring down unemployment rate and pull Europe out of debt crisis. Merkel urged immediate use of European Union (EU) funds to help young people land jobs so as to keep German economy vigorous. She added that EU funds should be the last resort to directly participate in banking restructuring. Economic Sentiment Indicator in the euro zone was 89.4 in May, 0.8 point over April's 88.6.
 
The People's Bank of China (PBOC) launched RMB 12 billion in repurchase on Tuesday and issued RMB 7 billion worth of bills, bringing net capital drain from the open market to RMB 17 billion this week. As a result, capital available in the market was tight yesterday, pushing inter-bank interest rate up. Net capital drain from the open market and robust financing demand from commercial banks are the two major reasons behind the tightness in capitals. China will announce manufacturing PMI for May tomorrow. It is widely expected that the figure will fall further, fuelling concerns over depressed manufacturing activities. Should the PMI come in negative as expected, commodity prices will face great downward pressure.          

In the other markets, LME base metals ended in positive territory, except for LME nickel. The US dollar index tumbled 0.75%. London gold prices gained 1.51%. Dow Jones Industrial Average and NASDAQ advanced 21.73 points and 23.78 points, respectively.

LME tin prices should find support at USD 20,800/mt today. Spot prices in Shanghai should move between RMB 143,500-146,000/mt.