Malaysian tin prices climbed to a 10-week high on Tuesday on strong Japanese demand and further gains are likely, traders said.
Spot tin on the Kuala Lumpur Tin Market shot up $225, or 3.4 percent, to end at $6,750 a tonne, after a strong gain in the London Metal Exchange (LME) on Monday. The price was the highest since September 27 when it was $6,770, traders said.
The Malaysian market had risen a sharp 5.8 percent in 2 days. "If the bullish trend in other LME metals continues, it is possible for the tin price to reach $7,000," said one trader.
Volume was 105 tonnes, down from 170 on Monday. Initial bids totalled 250 tonnes against offers of 110 tonnes. Japanese buyers eventually took 75 tonnes, Europeans 20 tonnes and Malaysians 10 tonnes.
Spot tin fetched a premium of $120 a tonne over LME prices on a cost, insurance, freight basis (CIF) for voyages to Rotterdam, dealers said.