SHANGHAI, May 24 (SMM) – SMM’s survey of major Chinese tin smelters over their opinions on this week’s price outlook shows the following results.
Half of them expect spot tin in Shanghai to fall further to RMB 105,000-107,000/mt. Pullback in SHFE tin and release of deliverable goods will drag spot tin prices down. SHFE 1609 tin is likely to fall to RMB 103,000-106,000/mt. A strong US dollar and falling crude oil will be the two biggest negative factors. The US dollar index rose above 95 after minutes of the US Fed’s April meeting indicated a high possibility for rate hike in June. More US Fed officials will make speeches this week, which will give investors some hint as to the US Fed’s policy path. LME tin hit a low of USD 16,000/mt on Monday. Growing LME tin stocks recently will also weigh on LME tin down to USD 15,700-16,000/mt.
Another 35% expect spot tin in Shanghai to stabilize at RMB 107,000-109,000/mt. Prior to release of more US economic data, the US dollar index will face technical corrections after big gains. This will offer some relief to LME tin, which will stabilize at USD 16,000-16,500/mt. SHFE 1609 tin should hold steady at RMB 105,000-108,000/mt. Tin smelters are not active in selling recently, and deliverable goods are gradually being consumed, which will ease supply pressure, thus helping spot prices stabilize.
Only 15% are bullish that spot tin in Shanghai will rebound to RMB 108,000-109,500/mt. The US dollar index will face downward corrections, which will allow LME tin to return to USD 16,500-16,700/mt. SHFE 1609 tin will challenge resistance at RMB 108,000/mt. Deliverable goods will be digested in the second half of this week. This, together with low selling interest at smelters, will ease supply pressure. Weak demand means any upside room in spot prices will be limited, though.