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Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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November 2019 | Base Metals


Tin: Dichotomy


We form the view that the recent weakness in tin prices is not fundamentally driven, but instead the result of momentum and technical selling. Although there is a striking dichotomy in the global tin market (looser on the LME, tighter on the SHFE), we argue that, on net, global refined market conditions have markedly tightened since H2-start. This should eventually lend support to tin prices and reverse the negative momentum.

Looking loose on the LME, but tighter on the SHFE
There is a striking dichotomy in the global tin market, with refined market conditions looking looser on the LME but tighter on the SHFE.

On the LME, exchange inventories are at 6,460 tonnes, little changed on the quarter but up roughly 4,470 tonnes or 200% since the start of the year. They are close to their highest since June 2016. This points to weaker demand conditions. In addition, the cash/three month spread is in an unusual contango. The backwardation in the three month/15-month spread has eased...

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