Resource News
Traders warn of disorderly tin market
By resourceINTEL · October 2, 2009 · 7:19 am · Leave a Comment
TIN traders have warned of a “disorderly” market in the metal with a single fund believed to have taken control of almost the entire stock of metal in warehouses owned by the London Metal Exchange.
The large holding in warrants to hold physical tin, amounting to more than 90 per cent of existing stocks, has helped to push up the short-term price of tin to a big premium over three-month futures, despite a worldwide surplus in tin.
The short-term price surge means that industrial buyers of tin that want the metal today are forced to pay a cash premium of $US730 ($840) per tonne over the price in three months’ time, despite there being no shortage of stocks.
Some buyers have complained about price distortion and have called for an investigation of the dominant position.
The owner of the large position is unknown, although names mentioned include Ebullio Capital Management, a hedge fund based in Southend-on-Sea, Essex, as a possible holder of the warrants.
The scale of the position has caused raised eyebrows among analysts and LME traders…read more at The Australian
