Tin ap­proaches Jan­uary’s 1-year high on sup­ply angst

Business World - - WORLD MARKETS -

LON­DON — Tin prices rose to­wards re­cent one-year peaks on Tues­day, boosted by wor­ries about tighter sup­plies af­ter data showed fall­ing ex­ports from In­done­sia and a weaker dol­lar, which lifted all base met­als on the Lon­don Me­tal Ex­change (LME).

Bench­mark LME tin closed up 1.9% at $ 21,500 a ton. Ear­lier, prices of the semi­con­duc­tor me­tal touched a ses­sion high at $21,475 and late last month they touched $ 22,000, the high­est since Fe­bru­ary 2017.

“There’s a short­fall in sup­plies from In­done­sia and in the longer term there are con­cerns about re­place­ment sources of tin,” said Christoph Eibl, chief ex­ec­u­tive of Tiberius As­set Man­age­ment, adding that the weaker dol­lar was a pos­i­tive.

The top pro­ducer’s re­fined tin ex­ports were 4,507 tons in Jan­uary, down 36% from the pre­vi­ous month and 35% lower than the same month a year ear­lier.

The world’s largest tin con­sumer is China, ac­count­ing for nearly half of global de­mand es­ti­mated at around 380,000 tons this year.

Ner­vous­ness about short­ages has been fu­eled by fall­ing in­ven­to­ries in LME- ap­proved ware­houses, which at 1,935 tons have crashed 67% since Fe­bru­ary last year, and can­celed war­rants — me­tal al­ready ear­marked for de­liv­ery — at nearly 35%.

Traders are also keep­ing a close eye on a large po­si­tion hold­ing be­tween 50% and 79% of tin war­rants.

Wor­ries about nearby sup­plies on the LME mar­ket can be seen in the pre­mium for the cash con­tract over the three- month for­ward around $ 90 a ton. The pre­mium has been a fea­ture since April last year.

Money man­agers’ net long po­si­tion at 1,384 lots or 6,920 tons has risen nearly 70% over the last month.

Up­side re­sis­tance for LME tin is at $22,000 and strong sup­port is around the 100-day mov­ing av­er­age cur­rently around $20,700.

Cop­per climbed 2.3% to $6,987 a ton. Late last year it hit a fouryear high above $7,300 a ton.

“From a ‘top-down’ per­spec­tive we ex­pect the Chi­nese and global de­mand will re­main solid and we find that in­dus­trial met­als out­per­form dur­ing pe­ri­ods of de­mand-led in­fla­tion,” Citi an­a­lysts said in a note.

“From a bot­tom-up per­spec­tive, cop­per and zinc are best placed to tighten and out­per­form as we head out of Chi­nese New Year and in to a strong sea­sonal pe­riod for met­als de­mand.”

Among other in­dus­trial met­als, zinc ended up 2.6% at $3,469 a ton, lead rose 1.8% to $ 2,561, nickel added 2.7% to $13,450 and alu­minum gained 0.70% to $2,139 a ton.

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