Tin Heads for Four-Month High on Concern About Limited Supply

Tin rose in London, heading for the highest close in more than four months, amid concern supply will be limited as Indonesian producers restrict exports.

Smelters in Indonesia, the world’s largest tin shipper, stopped deliveries this month as the Jakarta Futures Exchange awaited approval to trade tin contracts. A rule requiring ingots to be traded locally before export hampered transactions with customers. PT Timah, the third-biggest tin producer, declared force majeure on deliveries since Aug. 30.

“People are worried about where the tin supply is going to come from,” Gayle Berry, an analyst at Barclays Plc in London, said by phone today. “The Indonesian situation has a potential to seriously tighten the market.”

Tin for delivery in three months rose 1.7 percent to $22,250 a metric ton by 10:50 a.m. on the London Metal Exchange. A close at that level would be the highest since April 11. Prices climbed above the 200-day moving average at about $22,042, an indication to analysts who study technical charts of potential further gains.

Tin for immediate delivery settled yesterday at a $125-a-ton premium to the contract for delivery in three months, the largest backwardation since Aug. 17, 2010, and a signal of limited supply. Demand will exceed production by 3,000 tons next year, a fifth straight deficit, according to BNP Paribas SA.

Copper for delivery in three months rose 0.2 percent to $7,135 a ton on the LME. The metal for delivery in December gained 0.1 percent to $3.2455 a pound on the Comex in New York.

A government report tomorrow will show employers in the U.S., the world’s second-biggest copper consumer after China, hired more workers last month than in July, according to economists surveyed by Bloomberg.

Copper stockpiles tracked by the LME fell 0.1 percent to 603,275 tons, daily exchange data showed. Orders to remove the metal from warehouses declined 0.1 percent to 288,675 tons.

Aluminum and zinc rose in London. Nickel and lead slid.

To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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