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October 2017 | Base Metals


Tin: $21,000/tonne unbreakable


In line with our expectations, LME tin has been unable to break decisively above $21,000/tonne, confirming the presence of heavy selling pressure around this key technical level. While the present dynamics in the SHFE/LME prices do not suggest an increase in Chinese exports yet, we think it is only a question of time. Against this backdrop, the LME tin market should become looser, with higher inventories, lower prices, and weaker premiums on the way.

Quiet in spite of China’s return from Golden Week
While some industrial metals experienced meaningful rallies last week, the rise in LME tin was only modest (+0.3%) on fairly low trading volumes in spite of the return of Chinese players from their national holiday.

$21,000/tonne level unbreakable

Tin has failed to overcome technical resistance at $21,000/tonne. While it managed to close at $21,020/tonne on October 5, selling pressure has subsequently pushed prices lower. This seems to be driven by forward producer selling, judging by the tightening at the back end of the forward curve. The 3m-15m spread tightened to a backwardation of $420/tonne on October 12 from $385/tonne on October 5 and $322/tonne late in September. ...

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