Tin Advances on Supply Threats
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.
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.
Despite concerns over the euro-zone economy, demand in the region is helping to drive up the price of tin with both European and Japanese buyers dominating the market.
An increase in shipments of Indonesian refined tin exports reported in April was partially the result of a return to more favorable weather conditions from the first three months of this year.
Commodities may be teetering on second U of the W-shaped recovery. Tin continues to face a challenge, with a possible erosion in demand. The main culprit: the current global recession. Last week, ITRI Ltd, an international tin grouping, came up with a disturbing report stating that demand would likely drop 10-15 per cent this year, on the back of excess supply.
Commodities like tin, rubber and steel could be heading for a short-term rally in the near future bolstered by active buying interest from institutional and fund managers on most major world commodities, dealers said. Manufacturers worldwide were seen building up inventories to take advantage of the current weak US dollar, traders said. The weak greenback makes commodities attractive as a hedge against inflation.
The price of tin on the Kuala Lumpur Tin Market (KLTM) closed lower on Monday on lack of demand, dealers said. At close, the local tin price was down by US$80 to settle at US$13,650 per tonne from last Friday. The price of tin on the KLTM is likely to be steadier next week though on consistent demand from overseas buyers, dealers said. They said the metal price is likely to trade between US$13,900 per tonne and US$14,200 per tonne with the participation of European, Japanese and local traders.
Tin prices gained a whopping 18 per cent on the LME in the month of April, despite a huge gain in LME inventories by almost 15 per cent. Global production, however, is expected to fall 6.5 per cent by 21,000 tonnes, to 304,500 tonnes in 2009. According to the International Tin Research Institute demand for tin is expected to fall by 10.5 per cent in 2009 amid the global economic crisis. Hence, the market could be in surplus by 5,000 to 10,000 tonnes in 2009.
Malaysian tin jumped 7.5 per cent to score more than a 4-month high on Monday to US$ 12,080, as soaring London Metal Exchange prices and buoyant demand led by Europe boosted prices, one dealer said. The current price level was unseen since December 12, 2008. Tin price had peaked at $25,495/t in May 2008, but then slumped by more than 50 per cent in five months, due to the global financial crisis.
The tin price on the Kuala Lumpur Tin Market is reported to have ended higher yesterday by US$110 to settle at US$10,850 per tonne on low offerings. For full story, click here
A huge rise in the price of the tin used to can foods and beverages could fuel inflation and hobble crucial exports. For full story, click here
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