Tin Heads for Biggest Weekly Drop Since at Least 1989 on Demand

LONDON, July 13 -- Tin headed for its biggest weekly decline in London since at least 1989 as slumping exports from China heightened speculation that demand is weakening.

    China's overall exports dropped 21 percent in June from a year earlier, the state-run Xinhua News Agency reported, citing customs data. Inventories of tin in warehouses monitored by the London Metal Exchange have climbed the most among the six main metals on the exchange this year.

    "A very important part of tin consumption is electronics, which is still having a hard time," said Peter Kettle, manager of statistics and market studies at tin industry group ITRI Ltd. in St. Albans, England. "We're still looking at a 10 to 15 percent decline in overall tin consumption this year."

    Tin for delivery in three months slid $705, or 5.6 percent, to $11,900 a metric ton by 5:31 p.m. on the LME, the lowest since April 29. The metal was heading for a weekly drop of more than 17 percent.

    Electronic solders accounted for about 44 percent of world usage of refined tin in 2007, according to figures posted on ITRI's Web site. "A lot of consumer electronics are exported from China," Kettle said.

    Tin futures and options trading rose 72 percent in the first half, the highest volume growth, the LME said in an e- mailed statement today.

    The metal's 36 percent jump in the second quarter failed to reflect declining demand, according to ITRI's Kettle. "The market is oversupplied," he said.

    Tin Inventories

    Supply curbs in the tin market eased, with the premium for the September contract over the December futures falling to $450 a ton yesterday, down from $850 on July 6. In a market with ample supply, contracts closest to delivery are cheaper than future months. LME Chief Executive Officer Martin Abbott said the exchange hasn't had any member complaints about the tin market.

    Inventories of tin are at 17,720 tons, more than double the amount at the end of last year. Copper inventories have shrunk 24 percent and fell another 1.3 percent to 258,575 tons today, according to the LME's daily warehouse report.

    Copper declined $16, or 0.3 percent, to $4,879 a ton on the LME. Futures for September delivery dropped 1.75 cents, or 0.8 percent, to $2.22 a pound on the Comex division of the New York Mercantile Exchange.

    Chinese imports of copper products rose to a record 475,999 tons in June from 422,666 tons in May, according to preliminary customs data.

    Aluminum dropped 0.4 percent to $1,578.75 a ton, and lead declined 1.4 percent to $1,602 a ton. Zinc fell 1.8 percent to $1,501 a ton as nickel slumped 2.1 percent to $14,590 a ton.

    Overall trading rose 1.8 percent in the first half, with nickel volume up 19 percent, aluminum down 2.8 percent and copper up 1.8 percent, the LME said.

    (Source: Bloomberg)