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