Tin’s rise to decade highs fueled by supply fears
LONDON (June 11): Tin prices hit their highest level in more than a decade on Friday, as expectations of severe shortages due to supply and shipping disruptions created by Covid-restrictions 19 fueled another speculative buying spree.
The benchmark tin on the London Metal Exchange rose 1.1% to US $ 31,545 per tonne at 1557 GMT.
Welding metal prices hit US $ 31,620 per tonne, the highest since May 2011.
“The story of deficits does not go away. There are bottlenecks in Asia that affect supply and demand continues to rise,” said a physical tin trader. “A lot of people are looking for material in the spot market and on the stock exchange.”
TIN: Global tin supplies last year stood at around 330,000 tonnes, a significant drop from around 360,000 tonnes in 2019. Supplies are under pressure again this year due to lockdowns.
MALAYSIA: New tin purchases this week on the LME were triggered by Malaysia Smelting Corporation, the world’s third-largest manufacturer of refined tin, declaring force majeure on deliveries to customers.
CHINA: China’s refined tin production of 14,036 tonnes in May was down 8.2% from April.
SHIPPING: Congestion at southern China’s container shipping ports is worsening, as authorities step up disinfection measures amid an outbreak of Covid-19 cases, causing the biggest backlog since at least 2019.
PREMIUMS: The cost of tin in the physical market is typically the LME price plus a premium, which in the United States is US $ 2,700 per tonne, compared to around US $ 600 per tonne at the end of last year. .
The premium in Europe was around US $ 1,200 per tonne, compared to around US $ 400 at the end of December.
STOCKS: Historically low tin inventories in LME registered warehouses reinforced the idea of scarcity and created a significant cash premium over the three month tin contract this year.
OTHER METALS: Industrial metals as a whole were boosted by the weaker US currency, making dollar-denominated commodities cheaper for holders of other currencies.
Copper rose 1% to US $ 9,992 per tonne, aluminum slipped 0.5% to US $ 2,462.5, zinc added 1.6% to US $ 3,044, lead increased Nickel gained 1.8% to US $ 2,215 and nickel lost 0.3% to US $ 18,235.