CFD market re Tin up strongly at present, up $245, has hit $21,280 for the third time in the past week...are we about to breach that and move higher again?....based on the article that I just read (see below), it would appear to be the case....we have entered the '11 to '14 trading range for Tin with the top being $23,500 to $25,500 approx....are we about to resume the rise and continue right up to/test these levels over the next 12 months??....as per article below, the Tin price rise appears not just to be about low LME warehouse levels but also about rising demand as well....double whammy....
Three-month tin prices are working higher again. An underlying tail on yesterday’s candlestck suggested dip-buying, which has seen follow-through buying this morning.
Prices have overcome a downward-sloping RL; they will now need to clear resistance between $21,400 to $21,500 per tonne to confirm that another rally is under way.
The run-up above $20,000 per tonne was fast so we are not surprised that the pullback has been severe too. Drops to the UTL have, however, been short-lived.
The inset chart shows prices are working their way through the wide sideways trading range that dominated trading in 2011-2014 – the top of that range ran between $23,450 and $25,880 per tonne.
The stochastics have turned sideways in fairly high ground but if anything are looking neutral.
Marco issuesSomething seems to be stirring in tin again this morning, at least in China – January SHFE prices climbed 3.1% while the rest of the base metals were down an average of 1%.Tin exports from Indonesia were 4,892 tonnes in November, down 25% from October. In the first eleven months, exports totalled 57,508 tonnes, down 18% from the same period in 2015. Still, ITRI believes higher prices are leading to a pick-up in mining in Indonesia, especially at small scale-mining operations. The backwardation in the LME cash/threes has eased in recent days, which perhaps reflects more stock moving into LME-listed warehouses – over the past four days 360 tonnes have moved into sheds although 170 tonnes have left over the same period. C-3s was recently quoted at $115-135 per tonne backwardation. The latest run-up in prices may therefore be fresh buying. The forwards have tightened considerably since the end of November – the 3-15 month backwardation was $580 per tonne, basis the December 12 evening evaluation, from an average of $259b per tonne in November. This suggests a pick-up in forward selling, which would help to account for why the market has been capped in recent weeks.Nearby metal remains in concentrated hands. One entity holds 40-49% of the warrants while one holds a ‘tom’ and cash positions equivalent to 30-39% of the amount of metal on warrant.Global semiconductor sales totalled $30.5 billion in October, an increase of 3.4% on the month and a strong 5.1% year-on-year. World Semiconductor Trade Statistics forecasts sales of $335 billion in 2016, revised upward from $327.2 billion previously. Sales are forecast to grow 3% in 2017 and 2% in 2018 to reach $354 billion. A pick-up in China’s retail sales is encouraging – it should include a pick-up in demand for electrical items and therefore demand for solder.ConclusionGiven low stocks, the tightness and how concentrated nearby metal is held, we continue to favour the upside. It looks as though forward selling has capped the upside for a while but, with prices edging higher again, perhaps forward selling around this level has now been absorbed. The tin story is not just about supply – semiconductor sales turned higher after setting a low of $25.8 billion in April so October’s sales were some 18% above the lows. Improved demand may well prompt restocking at a time when stocks are low. We remain bullish.[/table][/table]
SRZ Price at posting:
5.3¢ Sentiment: Buy Disclosure: Held
Medium Term:
(20min delay)
