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Tin Climbs on Shortage Outlook as Copper Weakens on Inventories

Feb. 11 (Bloomberg) -- Tin advanced on prospects for a fourth year of shortages as copper declined on concerns that slowing industrial production from Europe to the U.S. may curb demand amid the highest stockpiles since November 2011.

Tin for three-month delivery gained 0.7 percent to $25,029 a metric ton on the London Metal Exchange at 3:39 p.m. in Singapore. Copper lost as much as 0.2 percent to $8,280 a ton and traded at $8,284. Markets in China, the world’s biggest metals consumer, and in Hong Kong, Japan, Korea, Singapore and Malaysia are closed today for Lunar New Year holiday.

While tin exports from Indonesia, the largest supplier, climbed 5.4 percent in January to the highest level in three months, sales may drop 24 percent to 75,000 tons this year because smelters probably won’t meet a higher purity rule that starts in July, according to exporter and analyst estimates last month. LME copper stockpiles climbed 6.3 percent to 399,825 tons last week, the highest since November 2011.

“In the near-term, you’re talking about more optimism and recovery,” Justin Smirk, economist at Westpac Banking Corp., said on Bloomberg Television today. “Once we get into the second half of the year you’ll start to see what we think is going to be softer-than-expected U.S. growth, the Europeans struggling to get any form of traction and of course China coming out of its growth and stimulus phase,” he said.

Prospects for slowing industrial production weighed on copper. Output in France, Europe’s second-largest economy, probably declined 0.2 percent in December from the previous month, when it rose 0.5 percent, according to the median of economist estimates compiled by Bloomberg before data today. U.S. production may have risen 0.2 percent in January from a 0.3 percent gain a month earlier, data may show this week.

Zinc was little changed at $2,206 a ton after reaching $2,218 on Feb. 8, the most expensive since Jan. 26, 2012. LME inventories dropped for a third week to the lowest since November, data compiled by Bloomberg show.

Aluminum rose 0.4 percent to $2,127 a ton, lead lost 0.1 percent to $2,419 a ton and nickel was little changed at $18,325 a ton.

To contact the reporter for this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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