KUALA LUMPUR: The Kuala Lumpur Tin Market (KLTM) is expected to extend its range-bound trading next week with the price of the silver metal estimated to hover between US$16,500 and US$16,700 per tonne.
A dealer said the slowdown in demand was due to the impacted Chinese economy taking the cue from the Covid-19 outbreak, which has dented global markets including commodities.
“China is our largest buyer and their economy is experiencing a tremendous slowdown from the rapid COVID-19 spread,” he said.
According to various reports, the worst is yet to come, with key sectors such as manufacturing, services and automotive bracing for supply disruptions, causing a global economic slowdown.
Based on a report by IHS Markit, China is currently the world’s second-largest economy after the US, compared with where it stood in 2003 during the Severe Acute Respiratory Syndrome (SARS) outbreak.
It is the second-largest importer of manufactured goods, amounting to US$1.674 tri in 2019, which accounted for 9.1% of global imports. It was also the largest exporter in 2019, with exports worth US$2.524 tri or 13.7% of global exports.
“It is a key country for industrial production and has a key significance for global value chains. China’s role globally and in the South Asian region, in particular, is currently much greater than in 2003, and the region’s economies are more interlinked,” it said.
Meanwhile, the dealer said the local market will continue to track the performance of the benchmark London Metal Exchange (LME) in the coming week.
During the week just ended, the tin market was mostly lower in line with the LME, with prices ranging between US$16,450 and US$16,540 per tonne.
On a Friday-to-Friday basis, the price on the KLTM remained the same at US$16,540 per tonne.
The price differential between the KLTM and the London Metal Exchange (LME) was at a discount of US$25 per tonne this week compared with a discount of US$45 per tonne last week.
Weekly turnover decreased to 81 tonnes from 91 tonnes last week, with the bulk of the trade involving buyers from China, South Korea, Japan, Taiwan, European countries, Pakistan, Bangladesh and Hong Kong. – Feb 22, 2020, Bernama
