SHANGHAI, May 26 (SMM) –In Shanghai spot tin market, mainstream traded prices rose to RMB 116,300-118,000/mt on Monday morning, driven by strong gains of SHFE tin last Friday. But prices fell back to RMB 115,500-117,500/mt in the afternoon, due to slump in SHFE tin. Goods from Yunnan Tin Group traded at RMB 117,200-117,700/mt.
SMM surveyed market players in domestic tin industry.
15% of them are bullish over tin prices this week: LME tin might will rise to challenge resistance at USD 16,500/mt on supply restrictions. SHFE 1507 tin contract will stay above RMB 116,600/mt. Spot tin in domestic market will follow SHFE tin up above RMB 117,000/mt.
Another 50% expect tin prices to hold stable this week: recent movement of LME tin suggests that the metal has been immune to changes in the US dollar index. Production cuts in Indonesia and China have sent LME tin inventories down to 15-month low, which will underpin LME tin prices. SHFE tin inventories were 755 mt as of last Friday, which will help SHFE 1507 tin contract hold steady at RMB 115,000-120,000/mt.
The rest 35% are bearish: Us Fed Chair Yellen said that the US Fed will begin raising interest rate later this year, citing recovery in US economy. This will favor the US dollar and drag LME tin down to RMB 15,800/mt. Recent negative Chinese economic data have dampened market sentiment and bulls are beginning to exit, so SHFE 1507 tin contract might fall to RMB 115,000/mt. Yunnan Tin Group and China Tin Group are resuming production, boding ill for spot tin prices.