LME tin stocks have now fallen by 47% since the start of the year and the pace of the run-down has accelerated in recent months. As a result the market has moved into backwardation and there is a general consensus that price prospects for tin are more favourable than those of the other LME metals.
Although prices have advanced strongly to over $21,000/tonne, there are several reasons for caution about what happens next. First, the rise has been accentuated by some short-term speculative buying. Secondly, the Chinese market has been rather sluggish and stocks there may still be rather high (see the special feature from page 7). Finally, the rapid recovery in demand seen in the first half of this year is now levelling out.