Oct. 4 (Bloomberg) -- Tin rallied to a six-month high in London, heading for a third weekly advance, on speculation supplies will be limited from Indonesia, the largest producer.
Other industrial metals including copper and nickel gained today as optimism grew that U.S lawmakers would reach a deal to end the budget impasse and avoid a default on the federal debt. Indonesia, accounting for 40 percent of global supply, introduced a rule Aug. 30 that refined tin must be traded on a local exchange before it can be shipped.
Tin demand will beat supply by 3,000 metric tons this year and 2,000 tons in 2014, Barclays Plc estimates. The metal, used in smartphones and packaging, climbed since the Indonesian rule took effect and smelters curbed exports, with only one exchange authorized to trade in Jakarta. The policy changes and lower shipments may create a bottleneck for the global market, Commerzbank AG estimates.
“The fundamentals are tight with the shipments from Indonesia being restricted,” William Adams, an analyst at Fastmarkets.com in London, said today by phone. “That’s probably going to play out for a bit longer.
Tin for delivery in three months gained as much as 5.5 percent to $24,000 a metric ton on the London Metal Exchange, the highest since March 15. It traded at $23,800 by 5:18 p.m. London time, set for a 1.9 percent weekly gain.
At present, only the Indonesia Commodity and Derivatives Exchange in Jakarta, or ICDX, is allowed to trade tin ingots before export from Southeast Asia’s largest economy. The regulatory agency, known as Coftra, has studied a proposal from the Jakarta Futures Exchange to also trade the metal, Sutriono Edi, head of the Commodity Futures Trading Regulatory Agency, said.
The first partial government shutdown in 17 years began on Oct. 1, placing as many as 800,000 federal employees on unpaid leave and closing some services. House Speaker John Boehner reiterated today that he won’t allow the U.S. to default on its debt, even if that requires Democratic votes as House Republicans met in Washington to find a solution to the budget impasse.
Copper gained as much as 1.4 percent on the LME today and nickel rose as much as 3.9 percent.
--Editors: Claudia Carpenter, Nicholas Larkin