LIVE FUTURES REPORT 13/02: Fresh 540t inflow does little to pressure LME tin price; lead tops gains

The three-month tin price on the London Metal Exchange consolidated during morning trading on Thursday February 13, with price action little affected by a 540-tonne inflow into LME-registered warehouses across Malaysia and Singapore, while lead futures gathered momentum over the morning.

Tin’s underlying price on the LME was recently seen at $16,575 per tonne, while volume was moderately high with some 60 lots exchanged as at 9.30am London time.

Yet this morning’s deliveries mark the largest single inflow of tin into LME warehouses since December 2019, while the bulk of LME-registered material continues to be held between both Port Klang and Singapore.

Market participants dealing in tin ingots maintain that both stockpiles are comprised of Malaysian and Indonesian-origin tin, while others have attested to a large amount of off-warrant material also held in Singapore ports.

Supporting the retention of material, LME tin’s forward curve is now trading in contango, with its benchmark cash/three-month spread recently trading in a $5-per-tonne contango.

Total on-warrant tin stocks now sit at 5,810 tonnes, with some 2,535 tonnes on-warrant in Port Klang and 2,475 tonnes on-warrant in Singapore.

LME sheds in the US port of Baltimore have also taken precedence as a stronghold for LME tin, with some 655 tonnes on-warrant in the region.

“I’ve hear that tin held in Baltimore is of Indonesian origin, and premiums have been quoted at around $400-500 per tonne for warrants,” a European-based warrant trader told Fastmarkets.

“In the mid-to-long-term I would be bullish on tin. Right now PMI’s are looking a bit depressing, but as soon as it starts to kick the other way, tin is such a small market and it could move quickly,” the trader added.

Elsewhere in the complex the three-month lead price outperformed the rest of the complex over the morning period, recently trading at $1,867.50 per tonne and up by just under 1%.

Turnover in LME lead was moderately low for lead over the morning, with just 950 lots exchanged as at 9.45am London time.

Despite total LME lead stocks largely unmoved at some 66,750 tonnes, demand for lead has waned in recent months, while the metal’s outright price has been broadly volatile.

Forward spreads in LME lead remain in backwardation, with the metal’s cash/three-month spread recently seen in a $7-per-tonne contango.

“While it remains far too early to speculate that we have reached the end of selling pressure, recent dip-buying interest and LME lead's technical configuration suggest that a rebound could emerge,” Fastmarkets analyst Andy Farida said in his Lead Today report.

Other highlights

  • In other commodities, Brent crude oil futures fell by 2.03% this afternoon, recently trading at $55.21 per barrel.
  • Meanwhile, the dollar index was recently trading 0.06% lower at 98.90.
  • In European data released this morning, Germany’s final consumer price index (CPI) declined by 0.6% month on month in January, in line with market expectations.
  • Later, the United States will be releasing both CPI and core CPI figures for January, in addition to unemployment claims.

Hassan Butt

hassan.butt@fastmarkets.com

Published

Hassan Butt

February 13, 2020

10:21 GMT

London