European tin market tightens

European tin market tightens

LONDON (Reuter): Stubborn tightness in good quality tin
brands, particularly Chinese and Indonesian, is driving European
premiums steadily higher, traders said yesterday.

Traders said Chinese tin was trading at premiums as high as
$60 per ton over LME cash prices. Last week premiums were quoted
at US$40/$50.

"The Chinese shipments aren't regular monthly shipments so
occasionally you'll see a glut of metal, reflected in a $20/$30
premium. But now stocks are depleted," a trader said.

Some traders were reluctant to quote premiums for Indonesian
tin, which was in scarce supply. In fact, the Indonesians
themselves were seeking to buy the metal in Europe, they said.

"They may be looking to cover themselves in case of delayed
shipments," a trader said. "Indonesian is very hard to get a hold
of."

But another said parcels of Indonesian tin may be coming in to
Europe in the near term.

Meanwhile the crisis in the Malaysian ringgit was having no
noticeable effect on the European physical market despite pushing
domestic tin prices sharply higher.

"Mining in Malaysia carries on as before despite the ringgit
prices. They can't automatically switch on production and they
don't have anything mothballed," a trader said.

The market overall was mildly bullish and several traders
expected prices to build on recent gains and hit the $6,000 per
ton level.

Three months London Metal Exchange (LME) prices were currently
just under $5,800, up around $100 from a week ago and $400 higher
than a month ago.