Malaysian tin fell 1.8 percent on Thursday, hitting a 4-1/2 month low, as a fresh slide in London metals saw the local market extending a liquidation that began a day. But Japanese buyer's traditionally big users of tin remained supportive, accounting for more than a third of the day's trade and prevented losses from deepening.
Spot tin on the Kuala Lumpur Tin Market fell $140 to $7,850 a tonne, on a volume of 130 tonnes. Its previous low was $7,800 on January 26. Over at the London Metal Exchange on Wednesday, tin closed down $220 to $7,705 a tonne on the second straight day of a technical sell-off.
London tin often lends direction to the price in Kuala Lumpur. "The LME has been knocked quite badly the last two days, but we've fared okay, probably because the Japanese have sold and are covering back now," said a tin trader on the northern Malaysian Island of Penning.
The Japanese, whose huge electronic industries need big volumes of tin for soldering purposes, accounted for 100 of the 130 tonnes traded on Thursday's market.
European interests accounted for another 20 tonnes, while Malaysians took the balance 10 tonnes. But initial bids were only for 25 tonnes, against the 130 tonnes offered by sellers, setting the stage for lower prices.
Dealers said the $80 gap between the price change in Kuala Lumpur and London widened accordingly the premium for a tonne of Malaysian tin made available to Europe.
The premium, based on a formula that includes freight, insurance and other financial costs, stood at $365 a tonne on Thursday, against on Wednesday's $285.
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