SHFE Tin Once Rose by More Than 6% but then was Affected by the Sufficient Supply and weak Demand

SHANGHAI, Aug 1 (SMM) - SHFE tin rose sharply today by 6.13%, but the increase narrowed to 4.38% as of the closing of the day. LME tin once rose by 2.35% and the increase narrowed to 1.41% as of 15:28, less than SHFE tin. 

In the spot market today, SMM1# Tin average spot price rose by 3.34% to 201,000 yuan/mt.

During morning, the smelters quoted higher and some enterprises were more willing to hold the prices firm. In this case, the price spread between enterprises expanded. According to the feedback from traders, the volume of quotations in the morning changed little, hence the price spread narrowed and the market transactions were very poor. Some merchants were more willing to pick up goods amid the low premiums. Downstream enterprises purchased as needed and were wait-and-see as the prices rose.

According to SMM, in terms of fundamentals, the domestic social inventory fell slightly as expected last week. The inventory of LME generally increased last week, hence LME tin prices rose less than SHFE tin. The import window showed signs of opening, but the current prices of imported products in the spot market were in slight discounts without obvious cost advantage. SMM believes that the increase in prices is unlikely to change the sufficient supply and weak demand amid the production resumption and low operating rates. Therefore, after the market sentiment subsides, tin prices are unlikely to rebound sharply in the long term.