Malaysian tin fell 0.6 percent on Tuesday to correct a widening freight premium to the European market, dealers said.
Spot tin on the Kuala Lumpur Tin Market (KLTM) closed $50 down at $8,885 a tonne after a transaction of 101 tonnes. In contrast, tin on the London Metal Exchange (LME) rose $25 to finish on Monday's trades at $8,875 a tonne.
The drop on the KLTM versus the rise on the LME narrowed the premium for shipping a tonne of Malaysian tin to Europe, after freight, insurance and other financial costs, to $245 from $320 on Monday.
"The premium was too high at $320, so a correction was needed," said a trader. Initial bids for Tuesday's KLTM totalled 39 tonnes against offers at 101 tonnes. Buyers came from Japan, Europe and Malaysia.