LME tin ends at record high on Indonesian smelters

Concerns over Indonesia's tin production pushed London Metal Exchange tin futures to a fresh record high Friday, with traders eyeing further gains.

LME three-month tin edged to a new all-time high of $11,050 a metric ton in early trade, up $275/ton on the Thursday PM kerb in illiquid conditions that triggered stops, traders said.

Tin, usually overshadowed by other LME traded metals, first moved higher in October, when the Indonesian government clamped down on independent smelters citing lack of proper licensing, prompting a 21.5% price spike.

"There have been fairly hard news over the past two weeks that the government is serious about the clampdown. There is some stock in the pipeline and LME stocks are quite high but there will be a big impact in around two months' time," Peter Kettle, analyst at metals consultancy CRU said.

Indonesia is the world's largest tin producer at 120,000-130,000 tons a year out of a total global production of 350,000 tons.

"The problems in Indonesia are more serious than the market realizes. The market is now in deficit after losing nearly three months of production from Indonesia. It could be two months before the government reorders smelters to be opened again," an industry source said.

Elsewhere, LME trade was choppy and hesitant before the release of U.S. November non-farm payroll data at 1330 GMT. The dollar showed little initial reaction to the data that detailed an increase of 132,000 versus a forecast of an increase 110,000.

The dollar's subsequent weakening and then rebound against the euro had little effect on metals prices. Systematic selling capped LME copper but aluminium picked up strength following reports of a strike threat at Alcan Inc.'s Alma smelter in Canada and strong speculative interest that could see aluminium push to $3,000/ton, a trader said. Workers' contracts at the Alma smelter expire Dec. 31.

In copper, a possible strike at Xstrata PLC's Altonorte smelter and ongoing contract negotiations at Corporacion Nacional del Cobre de Chile's Norte division will keep prices underpinned into next week, analysts said.

LME nickel retained its strong overall tone, trading in a $33,700-$34,250/ton range.

3 months metal (prices in dollars a ton)
Bid – Ask, Change from Thursday PM kerb

Copper 6880.00-6885.00 Dn 10.00
Lead n/a -1735.00 Up 28.00
Zinc 4358.00-4359.00 Up 73.00
Aluminium 2828.00-2829.00 Up 4.00
Nickel 34250.00-34300.00 Up 550.00
Tin 11095.00-11000.00 Up 370.00