Posted by Parvez Jabri

Posted by Parvez Jabri













3

MELBOURNE: London tin capitulated to more than five-year lows on Friday and is on track for a brutal 11 percent weekly fall, as growing supply from Myanmar and torpid demand punish prices.

Tin has given up nearly a quarter of its value this year, and the price fall is likely to trigger production cuts at some smelters in top exporter Indonesia and also in China, industry group ITRI said on Thursday.

"I'm selling a bit more than February and March, but not as much as I'd expect given the scale of the fall in tin prices," a trader in Shanghai said.

"We supply mainly end users, such as solder makers and tin plate, and they are reporting that demand is not that great, and hasn't really picked up after Lunar New Year."

Three-month tin on the London Metal Exchange was trading down 1.4 percent at $14,780 a tonne, having earlier hit its weakest since November 2009. The metal faces biggest weekly fall since September 2011.

LME copper firmed by 0.3 percent to $6,066 a tonne by 0257 GMT, extending a 1.8 percent bounce from the previous session, having hit four week lows earlier in the week.

Prices were on track to end the week up by half a percent as lower mine production cushions prices.

A recent pickup in oil and iron ore prices shows improving appetite for commodities that should feed into copper in the coming month, said Jonathan Barratt, Chief Investment Officer at Sydney's Ayers Alliance.

"I'm more supportive on copper because I think an impending reversal in the dollar will force people to reconsider their futures positions."

The US will start to weaken the dollar to shield its export market and protect growth, he said. A weaker dollar boosts purchasing power for commodity buyers using other currencies.

The most-traded June copper contract on the Shanghai Futures Exchange climbed 1.3 percent to 43,700 yuan ($7,056) a tonne, while lead pared a 2.2 percent gain, after it broke its 200-day moving average, triggering chart-based buys.

Physical copper demand was very weak, the trader said, shown by a climb in bonded Shanghai copper stocks to near 700,000 tonnes, while $65 premiums could not hold volume selling.

Asian aluminium premiums are likely extend their sharp slide, said a physical trader who has been exporting semi-manufactured aluminium products out of China, given persistent weakness in ShFe prices against LME.

Copyright Reuters, 2015


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