DJ Tin Fundamentals Support After Metal Hits 22-Month High

LONDON, July 27-- Tin's marked rise to a 22-month high is underpinned by solid fundamentals and the metal is therefore unlikely to see any acute slump, market participants said Monday.

A late burst in activity Friday sent the industrial metal, used primarily by the food packaging and electronics industries, to a peak of $19,750 a metric ton--a near two-year high.

The price has since been reigned in slightly, to trade about $19,550/ton, but remains at the highest level seen since September 2008.

"Fundamentally, tin still looks very good," one broker in London said.

Tin has a background of steadily falling inventories, traders noted. LME stocks dropped to 15,370 tons Friday, down 18.7% on the month and a significant 42.9% lower than they were six months ago.

Supply issues remain a concern as well, with Indonesia's refined tin exports in June having fallen 7.3% on the year.

Herwig Schmidt, head of sales at Triland Metals in London, said that, although a sustained performance is far from a given, he also didn't expect any sharp drop in the market.

"The consumer interest is there," he said.