While tin prices should be feeling the pressure from a stronger U.S. dollar, they are instead flexing their muscle and showing resiliency by trending higher.
According to a recent report from the Economic Calendar, the market’s unfortunate supply situation is being trumped by the fact that domestic currency has been trading at a multi-month high.
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Donald Levit wrote: “The tin market is undergoing a major supply chain adjustment as Indonesia is restricting tin exports. The country exported only 38,342 (metric) tons of tin during January-August this year, down 16% from a year ago. While the price response in tin encouraged Chinese tin smelters to step up production earlier in the year, the government’s environmental crackdown impacted some tin production.”
Our own Raul de Frutos echoed those sentiments, writing recently that industrial metals like tin (and also zinc and nickel) are riding the bull narrative due to a supply shortfall this year.
de Frutos wrote: “For others like aluminum and lead, the supply deficit isn’t obvious, yet, but the few capacity cuts were enough for bulls to push prices higher in the face of strong demand. Lastly, bulls are even chasing copper.”
Tin’s rally to close out October continued into November as the metal hit a two-year high in terms of prices.
How will tin and base metals fare for the remainder of 2016 and into 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds: