SHANGHAI, Jan. 12 (SMM) –About 35% of Chinese tin smelters surveyed by SMM are optimistic over tin prices this week.
These optimists expect spot tin prices in Shanghai to rise to RMB 98,000/mt. They expect domestic tin smelters to jointly hold back goods in an effort to support prices. The spread between low-end and high-end price should narrow. The low-end price should move higher.
Another 25% are bearish that spot prices in Shanghai tin market will drop to RMB 94,000-95,000/mt. Chinese stock market meltdown and poor Chinese economic data have soured market sentiment. SHFE tin will face downward pressure. Some suppliers are likely to cut prices out of fear that delivery goods will flow in.
The rest 40% expect spot tin prices in Shanghai to come to stabilize between RMB 96,000-97,000/mt and LME tin to move at USD 13,500-14,000/mt. LME tin fell sharply last week, but tin prices in Shanghai and on the SHFE were resistant to declines, due to tight supply in domestic spot market. Many tin smelters in China have cut output against low prices, poor demand and high raw material prices. Smelters even joined hands in holding back goods. On the other hand, downstream producers are taking a wait-and-see stance, against divergence between spot and futures prices. This will prevent spot prices from rising further.