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Tin premiums steady amid holiday slowdown

Keywords: Tags  tin market, London Metal Exchange, LME, delivered premiums, spot premiums, Grade A tin, Chris Prentice


NEW YORK — Delivered premiums for Grade A tin have held steady over the past two weeks despite a run-up in exchange prices as market sources reported limited activity in the second half of November.

"The last two weeks of November were very slow, though people came back to the market" Monday, one trader said, citing both the Thanksgiving holiday as well as consumers’ unwillingness to build inventories before the end of the year.

"It’s so quiet, we haven’t really been looking (for any tin)" for prompt delivery, a source at one alloy producer said, although he booked some forward material for delivery in the new year at existing spot premium levels.

The producer source said he anticipated that the next two weeks would be relatively busy ahead of the expected seasonal slowdown in the second half of December.

Premiums for Grade A tin remained at between $600 and $750 per tonne Monday afternoon, according to both buyers and sellers.

Three-month tin on the London Metal Exchange ended Tuesday’s official session at $21,750 per tonne, a 4.3-percent jump from two weeks ago.

The sudden climb could prompt some tin buyers to hold off if they think the price is poised for a downward correction, the trader said. "People may think it’s too expensive," he said, but due to logistics and freight costs he would not reduce delivered premiums to counterbalance the rising price.

Consumers who required spot tin over the past two weeks said demand has been relatively unchanged and they have had no difficulty getting the material they need, leaving delivered premiums with little reason to change, tin buyers said.

"There’s really just not been much change," a second alloy producer source said. He added that amid limited spot activity, his negotiations for contract premiums for next year are looking like they’ll put contract levels on par with current spot premiums.

While some consumers said they anticipate the same for 2013 contracts, some negotiations were said to be ongoing and could stretch into February.


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