SHANGHAI, Dec. 22 (SMM) –80% of Chinese tin smelters surveyed by SMM are optimistic that tin prices will continue rising this week.
These optimists see spot tin prices in Shanghai rising to RMB 100,000/mt in the first half of this week and stay at this high level for the rest of the week. They understand that a short squeeze on the SHFE will continue and that investors will continue opening long positions on the most active SHFE tin contract. Domestic smelters are holding back goods, out of bullishness and raw material shortage. Tin prices will lose rising impetus later this week on limited demand.
The rest 20%, most of whom are downstream producers, expect spot prices to stabilize. Rising prices have cooled buyers’ buying interest. Demand remains soft. The recent wave of price gains in spot market is driven mainly by rising SHFE tin. SHFE tin is likely to stop falling or even fall back after recent rise, which will deprive spot prices of upward momentum. On the other hand, output cuts by domestic tin smelters partly due to raw material shortage will offer support to tin prices.