Tin plunged the most in four years in London following a wave of selling from China’s onshore metals market, where sentiment has soured as investors focus on signs of economic weakness.
The metal, which is mostly used in soldering, dropped as much as 7% to the lowest since July 2016 on the London Metal Exchange. The decline tracked a sharp slump in prices as the evening trading session got underway on the Shanghai Futures Exchange.
All base metals were under pressure Tuesday as optimism over the rapprochement in U.S.-China trade relations gave way to concerns about the global economy. Factory activity across Asia and Europe took a hit in June, while the U.S. showed only meager growth, recent data showed. The latest price rout deepened losses posted last quarter as tin stockpiles rose sharply on the LME.
“Onshore selling has been behind today’s move,” Alastair Munro, a broker at Marex Spectron Group, said by email. Volumes spiked in a wave of selling as the Shanghai bourse reopened, he said. “It’s symptomatic of how the onshore markets view the base metals as whole.”
Tin was down 6.9% at $17,605 a ton by 3:55 p.m. on the LME, taking this year’s drop to about 9%.
After poor manufacturing data, tin, which is extensively used in the manufacturing industry, has been “probably the weakest link” among falling base metal prices, Richard Fu, head of Asia-Pacific region for Amalgamated Metal Trading, says by email.
By Mark Burton
