Tin, lead prices rise in London on supply concerns
Source: Hoovers
metalsplace.com
London Metal Exchange tin climbed to a fresh record high Monday on the back of ongoing supply concerns, with traders expecting further price volatility in the near term.
Three-month tin hit a fresh record high of $12,750 a metric ton earlier Monday before retreating to an afternoon kerb of $12,500/ton.
News that PT Koba Tin – one of Indonesia's largest tin smelters – declared force majeure to its tin customers on shipments and deliveries of metal was supportive to prices, analysts and traders said. The South Asian country produces around a third of the 360,000 tons of global annual tin output.
Similarly, uncertainty over the future of Bolvia's tin production boosted prices. On Friday, Bolivian President Evo Morales nationalized the Vinto tin smelter of Switzerland's Glencore International AG. The Vinto smelter produces about 12,000 tons of tin metal.
Adding to price support was a drawdown in tin inventories by 130 tons to 10,480 tons Monday. Tin stocks are down nearly 20% from the start of 2007.
Other base metals including copper, lead and aluminium were also sharply impacted by LME inventories and supply concerns.
Aluminium prices continue to hover near $2,700/ton despite a resumption of a strike in the Republic of Guinea.
Alcoa Inc. said Monday that there have been disruptions to its CBG bauxite operations in Guinea since fighting broke out and a strike resumed, but it's still unclear what impact this is having on production. Guinea is a key producer of bauxite, the raw material that makes alumina, which in turn makes aluminium.
Adding to price support, Hussein Allidina of Morgan Stanley said in a research report that "aluminium continues to present some concern in the market with over 90% of LME aluminium inventories still held by a single member."
However, capping those gains was an increase in aluminium stocks by 1,025 tons to 758,300 tons Monday, up nearly 9% from the start of the year and nearly 5% above year-ago levels.
Meanwhile, copper prices fell over 2% to an afternoon kerb of $5,470/ton as copper inventories rose 416 tons to 216,050 tons Monday, up roughly 14% from the start of 2006.
However, worries of a possible strike at Southern Copper Corp.'s Ilo copper smelter in Peru kept prices from falling sharply. The new smelter processes roughly 1.2 million tons of copper concentrates a year.
Elsewhere on the LME, three-month lead prices climbed nearly 3% to a PM kerb of $1,659/ton from Friday, driven by news that Xstrata Plc declared force majeure at its Northfleet lead refinery in the U.K. following reduced supplies from its Mount Isa smelter in Australia.
Northfleet produced around 161,350 metric tons of lead last year, using feedstock from Mount Isa.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Friday PM kerb
Copper 5470.0-5475.0 Up 110
Lead 1659.0-1660.0 Up 49
Zinc 3110.0-3111.0 Dn 10
Aluminium 2707.0-2708.0 Up 8
Nickel 34800.0-34850.0 Dn 1300
Tin 12500.0-12475.0 Up 175
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