Tin prices decreased last month with high volatility. The drop in prices appears similar to a pattern that took place in February and June.
Price drops of this magnitude on heavy trading volume usually point to price weakness. However, this year tin prices have recovered from similar price drops.
Before the latest price drop, tin prices increased somewhat dramatically. The price increase occurred on heavy buying volume, and tin prices looked poised to follow other base metals for a bull run.
Readers might remember that tin outperformed many other base metals last year. Tin prices rallied throughout 2016. Tin prices began to waver only in the beginning of this year, which then pushed tin into more of a sideways trend and/or up-and-down trend.
Despite the volatile drops, tin prices appear to keep returning to the same levels throughout this year. Although price drops appear hard to predict, they often appear as buying dips for buying organizations.
What About Industrial Markets?
To understand the industrial metals complex, MetalMiner analyzes the underlying DBB index trend. Both the long- and the short-term trends still point to a bullish market.
Even if the DBB index fell in September — caused by price retracement in some base metals, such as copper or nickel — no doubt October saw a big increase. Most base metal prices increased this month, driving the DBB index to higher levels.
The CRB index (commodities) has also traded higher this month, correlating again with the DBB index. We still expect upside movements for most base metals and the DBB index.
What Does This Mean for Buying Organizations?
Tin price drops appear as buying dips. However, given current market trends, buying organizations should be watching closely as to when to commit purchases to reduce risks. At the beginning of October, MetalMiner published a long-term perspective for base metals and steel.