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Tin premiums steady in lackluster market

Keywords: Tags  Tin, tin premiums, Grade A tin, low-lead tin, Suzy Waite

NEW YORK — Grade A tin spot premiums held firm amid tepid business in the first month of the year.

A few small spot deals were closed, but January was quiet for the most part, which has kept AMM’s spot premiums for Grade A tin between $600 and $750 per tonne.

"January started off relatively slow. There was a little pickup, but not great," one trader told AMM.

"Demand is off," a producer source said, attributing it to the slowing economy. "I think we’ll just keep bubbling along here."

"(You can get) some Grade A at $750, (but) there are some cheaper numbers around, too," a consumer said.

Although premiums for Grade A material are unchanged, contract premiums for higher-purity, low-lead material have experienced an uptick, rising to $800 to $850 per tonne, up $50 to $100 per tonne from last year.

A second producer source who books most of his business on contract said he was able to secure 2013 business for low-lead material at premiums between $700 and $800 per tonne, while a second trader said premiums have bumped up to $800 to $850 per tonne.

Sources cited a combination of rising tin prices and higher freight costs for the premium increase for the higher-purity, low-lead material.

Three-month tin ended the Feb. 1 official session on the London Metal Exchange at $24,850 per tonne, down 1 percent from $25,100 the previous day but up 2.1 percent from $24,345 at the beginning of January.

While high tin prices may encourage consumers to push for lower premiums, the second trader is not convinced they’ll be able to talk the numbers down. "(When) tin prices go up, so too do all the other costs. There’s maintenance charges, interest charges, the cost of financing. Ocean freights have gone up and inland freights have gone up. (Consumers) have no alternative at the moment. If they don’t accept premiums (are higher) then they won’t get any tin," he said.

"(Low-lead) is up a little bit. Just slightly up, but not much," the first producer source said.

Supply also is a concern, the consumer said. "There are no new mines coming on. And the quality of some of the ore (bodies) have been coming down, (which drops) the amount of tin available. Some premiums will go up as availability becomes less prevalent."

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