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LME tin closes near 3- year

highs, others mixed

LONDON: Tin prices soared to three-year highs on the London Metal Exchange (LME) today, buoyed by speculative and investment fund buying, traders said.

The metal peaked at $7,150 a tonne before easing back slightly to end the afternoon kerb close at $7,110, $210 up on Friday afternoon's kerb close.

Other base metals ended the day mixed.

"Tin went up on speculative and fund buying, but the trade were selling into it all the way up," one trader said.

"The next upside target is the 1992 high of $7,270, and if it gets through that bigger gains could be seen," he added.

But chartwatchers warned that prices may have to consolidate first before breaking above the level. Technical indicators suggest the current rally is getting overheated.

Traders said tin is underpinned by the fact that a large proportion of LME in stocks are held in financing deals. Good quality material is also said to be scarce.

Volumes were sporadic today on tin and other base metals.

Nickel hit a six-month high of $9,210 before closing slightly below it at $9,150, still up $50 on the day.

The close near the day's lows suggests the market may retrace some of its recent gains near term.

Copper was less perky, finishing $12.5 lower at $2,959.5 as it consolidated recent sharp gains.

"Copper took a little breather, and with no borrowing of the spreads around three month futures were bound to come down," a trader said. But the downside is seen as limited as global stocks remain at or below critical levels, another added.

Cash moved to a $65/70 premium over three month delivery prices versus $80/85 late Friday.

Physical traders in Europe and Asia reported slow conditions on the spot market, but US merchants and users reported a slight pick-up in demand.

Aluminium was quiet, boosted by light Far Eastern buying on the pre-market before heading lower with copper. The market ended $3 weaker at $1,940, well off the $1,960 high.

Zinc fell $15/16 to end the day at $1,039 on technical selling and amid signs that physical premiums in Europe and the US were easing on slack prompt business.

The West is heading for a 370,000-tonne 1995 zinc deficit, but stocks are too high to allow prices to move sharply higher, Billiton Metals said in a report. Lead ended off $5 at $643. Alloy was last quoted unchanged at $1,750/60.-Reuter