The London Metal Exchange (LME) tin prices surged strongly in the London market on Wednesday, exceeding $51,000 per ton during trading and reaching a record high. This round of increase is attributed to the resonance of capital inflow and expected supply disruptions, making tin one of the "leaders" in the recent industrial metals market.
Price Record: Reaches $51,675 in Trading, Up Over a Quarter Year-to-Date
Reports indicate that LME tin prices rose approximately 4.3% on the day, peaking at $51,675 per ton, surpassing the previous high set in 2022. Since the beginning of the year, tin prices have increased by more than 25%. Given its extensive use in electronic soldering, some trading funds also regard it as an indicator for electronic prosperity and computation-related capital expenditures.
More "Intense" Domestic Market: Shanghai Tin Hits Limit Up and Sets New Record
Compared to the LME, the domestic Shanghai tin market is steeper. Reports mention that the Shanghai Futures Exchange (SHFE) tin prices surged about 9%, hitting the daily limit up, peaking at 413,170 yuan per ton (approximately $59,212), marking the second time this week that it hit the limit up.
Supply Variables: Indonesia's Crackdown on Illegal Mining and Quota Delays Create Uncertainty
On the supply side, traders are closely monitoring the dynamics of Indonesian tin supply. Indonesia, the world's second-largest tin producer, has recently intensified its crackdown on illegal mining, which is believed to have affected the supply from major production areas. Despite a significant rebound in November exports, the report highlights that the Indonesian government has yet to approve mining quotas this year, raising questions about the sustainability of supply recovery.
Inventory and Term Structure: Inventory Rebounds, Forward Premium Suggests "Not Extremely Tight"
It is noteworthy that the sharp rise in tin prices does not entirely equate to "extreme spot tightness." The report points out that LME tin inventories have risen to an 11-month high. Furthermore, futures prices are significantly higher than spot prices, forming a "forward premium" (futures contango) structure, which usually indicates that the market has not faced extreme supply tightness as seen with some other metals.
