LONDON: Tin prices rose to their highest in more than a decade on Friday as expectations of severe shortages due to supply and shipping disruptions created by COVID-19 restrictions fuelled another speculative buying frenzy.
Benchmark tin on the London Metal Exchange was up 1.1% at $31,545 a tonne at 1557 GMT.
Prices of the soldering metal earlier touched $31,620 a tonne, the highest since May 2011.
"The story of deficits isn't going away. There are lockdowns in Asia affecting supply and demand is still rising," said a physical tin trader. "Lots of people are looking for material on the spot market and on the exchange."
Global tin supplies last year amounted to around 330,000 tonnes, a significant drop from about 360,000 tonnes in 2019. Supplies are under pressure again this year from lockdowns.
Fresh purchases of tin this week on the LME were triggered by Malaysia Smelting Corporation, the world's third-biggest refined tin maker, declaring force majeure on deliveries to customers.
China's refined tin output at 14,036 tonnes in May was down 8.2% from April.
Congestion at container shipping ports in southern China is worsening as authorities step up disinfection measures amid a flare-up in Covid-19 cases, causing the biggest backlog since at least 2019.
The cost of tin on the physical market is typically the LME price plus a premium, which in the United States is at $2,700 a tonne compared with around $600 a tonne at the end of last year.
The premium in Europe at about $1,200 a tonne compared with around $400 at the end of December.
Historically low tin stocks in LME registered warehouses have reinforced the idea of scarcity and created a large premium for the cash over the three-month tin contract this year.
Industrial metals overall were boosted by a lower US currency, which makes dollar-priced commodities cheaper for holder of other currencies.
Copper was up 1% at $9,992 a tonne, aluminium slipped 0.5% to $2,462.5, zinc added 1.6% to $3,044, lead gained 1.8% to $2,215 and nickel ceded 0.3% to $18,235.