Tin and nickel have been in a battle for the highest priced non-precious metals traded on the LME. Currently the price of tin on the LME is $23,450 per tonne, while nickel is priced at $21,645 per tonne. Comparing the supply and demand fundamentals of the two markets is essential.
Bloomberg reports that the price of tin and other base metals rose on speculation that strikes will decrease supply.
CNBC reports that industrial metals like tin are moving up an indicator that the economy is recovering as demand increases.
The tin market in 2010 was characterized by climbing prices and a supply deficit. Expectations that this year would be a repeat are being washed away as both prices and demand have slipped.
Reduced tin production from Indonesia has had a big effect on prices for the base metal. Fearing that the high prices will encourage a wave of new production, Indonesia has stated that it will limit production to 100,000 tonnes, which could cause a larger supply deficit in 2011, boosting prices even higher.
Tin has already advanced approximately 40 percent this year, and is the top gainer of the base metals on the LME with second-place nickel trailing by nearly 13 percent.
The global tin market is expected to be in surplus by between 5,000 and 10,000 metric tons in 2009 as a result of the sharp dip in world consumption caused by the global economic slump since the fourth quarter of 2008. For full story, click here
The price of tin was given a nearly 6 percent boost last week from Yunnan province’s announcement that it would spend about $3 million on building a 100,000 tonne stockpile of tin. The tin stockpile is a part of a wider base metals stockpile plan meant to help support local metals smelters.
Monday, September 19, 2011