Tin prices jump to record highs on low stocks

Tin prices hit record highs on Friday, driven by falling inventories in exchange warehouses, although looming US rate hikes and concerns over debt-ridden China Evergrande kept a lid on further gains.

The most-traded October tin contract on the Shanghai Futures Exchange jumped as much as 4.8% to a record 287,960 yuan ($44,576.54) 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 also hit a historic high of $36,500 a tonne, having gained 76% so far in 2021.

"It's a good time, especially for producers," said a tin trader, adding that a production issue at Malaysia Smelting Corporation, 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 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 US Federal Reserve hinted at a sooner-than-expected rate rise.

Fundamentals

• LME copper rose 0.5% to $9,316.50 a tonne at 0558 GMT, aluminium fell 1% to $2,920.50 a tonne and nickel decreased 0.8% to $19,190 a tonne.

• ShFE aluminium fell 1.1% to 23,125 yuan a tonne, copper rose 0.6% to 69,210 yuan a tonne, zinc advanced 1.6% to 23,000 yuan a tonne and lead was up 1% at 14,360 yuan a tonne.