May 20, 2020 / 5:48 AM / 2 months ago

METALS-Shanghai tin hits 3-month high on supply shortage concerns

(Updates prices)

By Mai Nguyen

SINGAPORE, May 20 (Reuters) - Concerns about a supply deficit of tin this year powered Shanghai prices of the metal to a three-month high on Wednesday and sent London tin to its highest in more than three weeks.

Three-month tin on the London Metal Exchange (LME) rose 0.8% to $15,475 a tonne at 0704 GMT, having hit $15,500 a tonne earlier in the session, the highest level since April 28.

The most-traded tin contract on the Shanghai Futures Exchange (ShFE) climbed as much as 3.5% to 135,390 yuan ($19,056.13) a tonne, a level unseen since January 23, before easing to close at 134,920 yuan a tonne, up 3.2%.

Analysts said reduced global tin production caused by coronavirus-led lockdowns is likely to result in supplies falling short of demand and ensure prices for the metal, used in electronics, will outperform those of other base metals this year.

"It is still in a huge backwardation. Demand seems robust enough for premiums to rise enough for opportunistic players to come in and get involved," said a Singapore-based metals trader, referring to a market condition when near-term prices are higher than future prices, which usually indicates tightness of short-term supplies.

FUNDAMENTALS

* SPREAD: The premium of LME tin cash over the three-month contract CMSN0-3 was last at $130 a tonne, indicating near-term supply tightness. The premium reached $175 a tonne last week, its biggest since June 2019.

* OTHER PRICES: LME copper edged up 0.2% to $5,364 a tonne and aluminium was almost unchanged at $1,492.50 a tonne, while zinc fell 0.5% to $2,024 a tonne.

* SHANGHAI PRICES: ShFE copper advanced 0.3% to 43,730 yuan a tonne, aluminium was unchanged at 12,875 yuan a tonne and nickel jumped 1.2% to 102,580 yuan a tonne.

* JAPAN: Japan's core machinery orders slipped in March, suggesting a widening hit to the economy from the coronavirus.

* BATTERY: General Motors Co is "almost there" on developing an electric vehicle battery that will last one million miles, a top executive said on Tuesday.

* THE UNITED STATES: U.S. homebuilding dropped by the most on record in April and permits for future construction tumbled, underlining fears that the pandemic would lead to a deep economic contraction.

* For the top stories in metals and other news, click or

$1 = 7.1048 yuan Reporting by Mai Nguyen, Editing by Sherry Jacob-Phillips and Devika Syamnath

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