Shanghai tin drops on profit-taking

SHANGHAI, Sep 16 (SMM) – Shanghai tin prices opened sharply lower on Monday, after returning from the holiday-extended weekend, as substantial losses in its London counterpart dampened morale among longs, driving them to take profits.

The most active tin contract on the Shanghai Futures Exchange for January Delivery dived more than 3% to 135,350 yuan/mt, its lowest in seven trading days, in early morning.

Three-month tin on the London Metal Exchange extended its decline from Thursday to a low of $16,500/mt on Friday, its lowest in more than a week.

Malaysia Smelting Corp Berhad, the world’s third-largest refined tin producer, does not expect its output to fall this year, according to a Reuters report. The producer also sees a few new mines to come online in 2020.

Earlier this month, producers including the world’s top two, China’s Yunnan Tin and Indonesia’s PT Timah, said they would reduce production by over 30,200 mt this year, which accounts for 10% of global supply.

Tin fundamentals remained barely changed, SMM believes, with smelters in stable operation and downstream consumers cautious about procurement.

SMM data showed that production of refined tin in China climbed 1.4% from July and came in at 12,747 mt in August.

For SHFE tin, it is likely to meet strong resistance at 139,000 yuan/mt, where is the low end of its previous range and the 10-day moving average stays. Support is seen at the 60-day moving average, as low as 136,000 yuan/mt.