SHFE Dropped Nearly 12% After Opening, Does It Signal A Cooling Market?

SHANGHAI, Mar 10 (SMM) - SHFE tin jumped to a historical high of 395,000 yuan/mt on March 9, and slumped nearly 12% immediately after opening today. As of 11:00 am Beijing time, the contract was reported at around 343,660 yuan/mt, a drop of 7.56%. LME tin slumped 18.2% yesterday, and retreated some of the losses and gained 1.56% as of 11:05 am Beijing time.  

In the spot market, the prices basically shadowed the moves of futures. As of March 9, SMM #1 tin reached its highest since recording, and dropped to 345,000 yuan/mt today, a drop of as much as 6.38% compared with yesterday.

As far as SMM understands, the intraday spot shipments improved slightly, and market transactions were also more active when the prices dipped. And non-deliverable low-priced goods even popular.

On the fundamentals, domestic warrants inventory rose steadily, while overseas inventory stood unchanged. Violently fluctuating spot prices have suppressed market transactions, and the downstream stood wait and see.

In terms of futures market, overnight SHFE tin dropped further and hovered around 340,000 yuan/mt, with less investors staying in the market.

To sum up, tin prices are returning to rationality after wild fluctuations, and the longs and shorts will start their game around the previous price range. Hence tin prices may stay congested in the short term.