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.