Base metals prices on the LME were mostly suppressed during morning trading on Monday June 17 amid fragile risk sentiment.
Continuing trade tensions between the United States and China and fresh geopolitical tension between the US and Iran, coupled with a slew of lackluster economic data from China, are capping any significant price gains.
“Whatever gains we seeing today are too meager to call for a turnaround. In fact, risk sentiment remains fragile and vulnerable to any hiccups from US-China or US-Iran [trade tensions],” Fastmarkets analyst Andy Farida said.
“And a disappointing FOMC meeting could unravel the recent gains - and the path of least resistance remains downwards,” he added.
The LME three-month tin price was the worst affected, trading down $275 per tonne from the June 14 PM kerb at around $18,930 per tonne during morning trading on Monday.
The suppression of the three-month tin price has been attributed by analysts to a tighter backwardation in forward spreads and as the metal typically trades in a backwardation, it is particularly susceptible to swings in spreads.
The cash/three-month spread was recently trading in a $151-per-tonne backwardation compared with a $230-per-tonne backwardation on June 13. Indeed, the loosening backwardation has attracted metal back onto the LME with 1,085 tonnes put back into LME warehouses in Port Klang, Malaysia and Singapore this morning.
LME tin stocks have increased sharply, rising 35.6% to 4,700 tonnes as of 9am on Monday from 3,465 tonnes on June 12, while the metal’s loosening backwardation continues to attract material back onto the exchange.