(Updated)

Tin prices jump to record highs as inventories weaken

Tin prices jump to record highs as inventories weaken
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HANOI (Sept 24): Tin prices hit record highs on Friday as inventories fell in exchange warehouses, although looming US rate hikes and concerns over debt-ridden China Evergrande kept a lid on gains.

The most-traded October tin contract on the Shanghai Futures Exchange (ShFE) jumped as much as 4.8% to a record 287,960 yuan (US$44,545.51) a tonne. The contract has leapt 90% so far this year to be the best performing base metal on ShFE.

Three-month tin on the London Metal Exchange (LME) also hit a historic high of US$36,500 a tonne, having gained 79% so far in 2021.

"It's a good time, especially for producers," a tin trader said, adding that a production issue at Malaysia Smelting Corp Bhd, the world's third-biggest refined tin maker, was a major factor this year.

Prices can go up more based on supply and demand, although a rate hike by the US Federal Reserve (Fed) will likely suppress the rally, the trader said.

Tin inventories in LME warehouses fell to 1,180 tonnes on Sept 22, the latest exchange data showed, down 79% from the same time last year. ShFE tin stockpiles were last at 1,702 tonnes, hovering near an April 2016 low of 1,197 tonnes hit on Aug 27.

The global tin market deficit is expected to rise to 12,700 tonnes in 2022 from 10,200 tonnes this year, the International Tin Association said in June. Prices for the metal have gone up due to high demand from electronics firms, pandemic-led supply disruptions, and historically low inventory levels.

Further gains on Friday were limited as markets watched out for signs of default from property developer China Evergrande, while the Fed hinted at a sooner-than-expected rate rise.

Fundamentals

• LME copper edged up 0.1% to US$9,280 a tonne by 0712 GMT, aluminium fell 1.1% to US$2,917 a tonne, and nickel decreased 1% to US$19,160 a tonne.
• ShFE aluminium fell 1.2% to 23,100 yuan a tonne, copper rose 0.6% to 69,250 yuan a tonne, zinc advanced 1.5% to 22,985 yuan a tonne, and lead was up 1% at 14,355 yuan a tonne.