SHANGHAI, Aug 31 (SMM) – SHFE tin crashed below the mid end of the Bollinger Bands on Monday, and closed down 2.67% the next day. LME tin also fell, losing 1.96% as of CST 15:39 yesterday.
The average spot price of SMM1# tin was 196,500 yuan/mt yesterday, down 1.26% from the previous day. Smelters in the spot market lowered offers amid falling futures prices. Trades in the spot market were thin due to tight supply. Downstream companies continued to purchase only as needed.
Orders of downstream solder enterprises did not improve significantly in August when compared with July. Tin foil companies restocked due to low tin prices and anticipation of better consumption in the second half of the year. However, tin ingot demand from tin foil companies could hardly sustain. In terms of supply, most smelters have resumed normal production, and the import window has been open in August, which will lead to an increase in the subsequent import of tin ingots and alleviate the shortage of domestic tin ingots.
Domestic tin inventory under SHFE warrants fell sharply thanks to improved trades in the spot market. Low inventory has given some support to tin prices.
Suppressed demand amid high prices and rigid demand left tin prices moving rangebound. Tin prices will continue to move sideways, unless there are major events that reverse the balance of supply and demand in the market.
