SHANGHAI, Jul. 5 (SMM) – SMM’s survey of major Chinese tin smelters over their opinions on this week’s price outlook shows the following results.
About 45% of them expect spot tin in Shanghai to rise further to RMB 122,000-124,000/mt. They attribute the latest round of price rise mainly to market speculation triggered by expectations for looser monetary policy. Possibility is low for big price corrections in the short term. SHFE 1609 tin will advance to RMB 122,500-125,000/mt. A weaker dollar due to small chance of US rate hike anytime soon will push LME tin up to USD 17,800-18,200/mt.
Another 30% expect spot tin in Shanghai to stay at current highs of RMB 116,500-122,500/mt. SHFE 1609 tin will lack momentum for more gains. There are no signs of further long buying following SHFE 1609 tin’s big price gains during last Friday’s night session, with exit of shorts reported. SHFE 1609 tin should consolidate at RMB 115,500-122,500/mt. The US dollar index will have limited room for further declines, despite low possibility of US rate hike. As such, LME tin will hover at USD 17,000-17,500/mt.
The rest 25% are bearish that spot tin in Shanghai will fall back to around RMB 115,000/mt. They understand that the latest round of price rise was driven mainly by market speculation. With no support from market fundamentals, prices will face pullback. SHFE 1609 tin will drop below RMB 115,000/mt, and LME tin will fall below USD 17,000/mt, due to profit-taking by longs.