The gloomy conditions of economic activity in China and the United States have caused tin prices to fall
The gloomy conditions of economic activity in China and the United States have caused tin prices to fall
Tuesday, 07 May 2024

Price Indicator



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 Tin Focus:

  1. China Manufacturing Index
  1. United States economic data 


Market Review

Tin's performance declined by 5%, triggered by the low release of China's Manufacturing Index figures as the main global tin consumer country.  China's official Manufacturing Purchasing Managers' Index (PMI) fell in April, to 50.4, versus an expansion of 50.8 in March. The market forecast is 50.3 in the reported month. The index continues to stay above the 50 mark, which separates expansion and contraction. NBS Non-Manufacturing PMI fell to 51.2 in April versus 52.2 forecast and 53.0 figure in March. But on the upbeat data front, China's Caixin Manufacturing Purchasing Managers' Index (PMI) rose to 51.4 in April, compared with an expansion of 51.1 seen in March. The figure beat market estimates of 51.0 in the reported month.  China's economic conditions greatly influence fluctuations in world tin prices, so that the worsening of China's economic conditions also weighs on tin's performance

On the data side, the condition of the US economy is still in a gloomy position. Activity in the S&P Global Manufacturing PMI was recorded at 50.0, above expectations but lower than the previous month's 51.9, indicating stabilization in manufacturing activity. In contrast, the ISM Manufacturing PMI showed a contraction in this sector with a reading of 49.2, far from the forecast of 50.0 and down from March's expansionary figure of 50.3.

The US economy continues to post mixed results. Q1 Gross Domestic Product (GDP) missed the target. However, inflation data related to the first quarter of 2024 provides a warning that the price trend is shifting upward, which may hold back the Fed from easing policy sooner. Likewise, job vacancies fell to their lowest level in three years, falling by 325,000 in March. The data collectively point to weakening US factory activity and a weakening labor market.

Market View

The Fed Still Maintains Interest Rates, Tin Expected to Strengthen

The release of a statement on the results of the meeting issued by the chairman of the US Federal Reserve, Jerome Powell. At last Wednesday's meeting the Fed stated that they would keep interest rates on hold and said that they would reduce the pace of balance sheet reduction. There is no further clarity regarding the potential for interest rate cuts in the remainder of this year.

Powell said that currently it is not the right thing to lower interest rates because the progress of reducing inflation in America is not yet close to the target of 2%. Powell also added that the latest inflation data has not given the Fed greater confidence. During the press conference Powel said monetary policy would be implemented meeting by meeting adding that it will ensure a smooth transition in the money market. This will trigger a decline in the USD currency and make tin prices cheaper and trigger demand growth thereby strengthening world tin prices.

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