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

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December 2019 | Base Metals


Tin: Firmer fundamentals to support prices


LME tin traded sideways for most of November, having been the worst performer so far this year (-15%). But we continue to think that the price is undergoing a bottoming-out process, driven by tighter refined market conditions (proxied by falling visible inventories), in a regime in which the fundamentals have come to matter increasingly more in the price formation in recent months. We expect a steeper path for tin prices in the months ahead.

Trading regime
The correlation between daily returns of tin and daily returns of the five other base metals has moved from extremely positive (+0.9) to extremely negative (-0.6) between July and November. This indicates that the behavior of tin prices has become increasingly driven by idiosyncratic factors (its fundamentals) in recent months.

Fundamentals
The WBMS estimates that the global refined tin market was essentially balanced in September and in an “apparent” deficit of 4,100 tonnes in the first nine months of 2019.

According to the WBMS, global refined production grew by 2.8% year on...

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