SMM Morning Review - 2010/12/9 Tin Market

SHANGHAI, Dec. 9 (SMM) -- LME tin market opened at USD 25,250/mt and closed at USD 25,625/mt overnight, up by USD 375/mt from a day earlier, with the highest price at USD 25,900/mt and the lowest price at USD 24,800 mt. Daily trading volumes were 338 lots and positions were 19,368 lots. LME tin inventories were up by 184 mt to 20,693 mt.

LME base metal prices largely ended with gians on Wednesday from improved demand prospect, despite that the US dollar climbed. PT Timah announced on Wednesday that tin output from the company in 2010 was 40,000 mt, lower than previous estimation of 45,000-50,000/mt, as heavy rain hampered tin ore exploration. Indonesia government announced on Wednesday tin output from the country in 2010 will grow from 54,646 mt in 2010 to 95,097 mt. In addition, the launch of ETCs product will increase market demand for base metals and may lead to tight supply, which is positive for base metal prices. From macro point of view, upbeat sentiment from preferential tariff cut pushed up yields of the US State government bonds in the short term, driving the US dollar higher. Economic data announced from Germany boosted market confidence. Industrial output in October from Germany was up by 2.9% compared from a month earlier, and was up by 11.7% from a year earlier, with previous estimation of 0.8% MoM growth, indicating the economy recovery pace in Germany is accelerating. Expectation of interest rate hike in China still lingered in the market, and base metal market may be weighed down.

SMM believes that LME tin prices will move around USD 25,000-25,500/mt amid intense struggle between shorts and longs on December 9th.

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