Tin prices fell on Tuesday as exporter from Indonesia, the world's largest tin producer, are slated to plunge this quarter to the lowest price level in over a year. In addition to the price of the metal dropping, the Indonesian government has also sought to impose more stringent rules and regulations on the export of tin.
The Chicago Tribune reported that overseas sales of tin may drop 30 percent to 16,000 metric tons from 22,825 tons a year earlier, the median of estimates from one analyst and six smelters showed. Accordingly, the Tribune wrote that tin futures fell 9.8 percent this year to $20,150 a ton on the London Metal Exchange Monday. They reached $23,849 on April 24 after the Indonesian government mandated that all refined tin had to be traded through the Indonesia Commodity and Derivatives Exchange starting in August last year. This was done in an effort to create a benchmark price and challenge the primacy of the LME.
Many analysts believe the reason that tin futures have slumped 16 percent from a six-month high in April was that slowing economic growth may lead to less demand in China, the biggest consumer of industrial metals. The Indonesian government hoped to counter the decreasing prices of the metal by restricting supply and increasing the export of higher value products.
Copper rises as China cuts interest rates
Bloomberg reported that copper prices reached a two-week high on Tuesday as China's central bank cut interest rates, leading to speculation that borrowing costs may decline. Tuesday's rise is a reversal from the previous declines in copper prices. Copper had seen weekly declines over the last few weeks amid news that China, the largest importer of the red metal, cut demand forecasts as factory orders in the country slowed and expectations for a flagging economy grew. The reduction in interest rates may be a sign of a more broad-based easing for China, and may also be having an effect on commodity prices, Bloomberg wrote.
"The repo-rate cut follows a long list of targeted and modest easing measures that Beijing has deployed in the past few months to help small business and public housing," said RBC Capital Markets Ltd. said in a note today.
According to Bloomberg, copper for December delivery gained 0.4 percent to $3.0515 a pound by 7:51 a.m. on the Comex in New York after earlier reaching $3.0635, representing the highest mark since Sept. 29. The contract for delivery in three months rose 0.4 percent to $6,737 a metric ton on the London Metal Exchange.
Nickel takes the lead among industrial metals
Nickel posted gains on Tuesday as investors await the eurozone industrial output data report and as Chinese trade figures beat expectations.
The metal for delivery in three months on the LME rose for a second day, climbing as high as $16,623 a metric ton. It was up 0.9 percent at $16,603 a ton at 3:04 p.m. Hong Kong time.
Bloomberg reported that nickel increased as much as 1 percent after closing yesterday at its highest mark since Oct. 6. Industrial output in eurozone countries during August fell 1.6 percent from the previous month, when it saw an expansion of 1 percent, said a Bloomberg News survey before data today. Additionally, trade figures from China turned out to be better than expected, giving nickel another boost.
China is the world's largest nickel importer, and news that its exports increased 15.3 percent from a year earlier, the biggest rise since February 2013 and more than the 12 percent median estimate by a Bloomberg survey of analysts may have given the metal a boost as industrial outlook in China improved.
"Markets generally have taken comfort from the latest China economic data," said Gavin Wendt, founder and senior resource analyst at Mine Life Pty in Sydney to Bloomberg.
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