LONDON, Jan 18, 2017 – The London tin market remains a tight and crowded space. True, stocks of the soldering metal registered with the London Metal Exchange (LME) have rebuilt from November’s low of 2,895 tonnes to a current 4,160 tonnes.
And true, the tightness in the nearby spread structure appears to have correspondingly eased to the point that the benchmark cash-to-three-months period CMSN0-3 actually flipped into small contango last week for the first time since September.
But stocks are still low by any historical standard and spreads are still stressed, that cash-to-3s period ending Tuesday valued at $10 per tonne backwardation. The underlying problem seems to be a lack of deliverable metal, even with the persistent cash incentive presented by the backwardation, which flexed out as wide as $270 per tonne last month.
There is tin in China. That much is clear from the 3,846 tonnes registered with the Shanghai Futures Exchange (ShFE). But it is trapped in China behind that country’s 10-percent export duty. Or it was.
China may just have quietly removed that barrier and if it has done, it would have major ramifications for global tin flows and the metal-starved London market. Emphasis on the word “may” in that last sentence. There is still a good deal of uncertainty as to what exactly may, or may not, have happened.
For the rest of this column, click here: http://www.reuters.com/article/tin-china-ahome-idUSL5N1F85C9