Their performance was so substantial that it brought the company from red to black when compared to the previous year. Revenue improved by 7% when compared to the same period in 2015.
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MSC claims the improved profit came, in part, due to higher sales volume of refined tin, a positive impact from foreign currency translations and a favorable valuation adjustment on tin inventory due to higher closing prices for the metal at the end of Q1 this year.
Talking about this year’s projections, MSC stated tin prices had improved to some degree, but market conditions are still a challenge with global commodity and resource sectors still unstable from the current volatile commodities market.
Stated the company: “Despite these challenges, the underlying operations of the group comprising Butterworth International Smelter and the Rahman Hydraulic Tin mine are expected to perform satisfactorily for the current financial year, but the board remains cautious that the group’s financial results will continue to be impacted by tin price and foreign exchange fluctuations.”
Speculative Metals Rally
The recent rally in metals prices has caused some analysts to claim that it’s just purely speculative. Our own Raul de Frutos has some thoughts on what they mean exactly by “speculation.”
“Speculation is the act of trading an asset, with the risk of losing part of all of the capital invested, in the expectation of a substantial gain,” de Frutos said. “For traders to trigger a price rally there must be a fundamental reason justifying that the risk of loss is more than offset by the possibility of a significant gain; otherwise, there would be very little motivation to speculate. So, in reality, every price movement, especially in commodity markets, is speculative.”
You can find a more in-depth tin price forecast and outlook in our brand new Monthly Metal Buying Outlook report. Check it out to receive short- and long-term buying strategies with specific price thresholds.