Price Performance Indicators

Focus:

• Within a week (6/3-10/3) the ICDX tin price weakened by 1.58%.
• Expectations of an increase in interest rates.

The ICDX tin price weakened by 1.58% in mid-March burdened by the threat of strengthening the US dollar due to the Fed's plan to raise interest rates.

Market Review

Tin fell on Monday (6/3/2023) after China set a lower-than-expected economic growth target. Chinese government policies dampen hopes of a strong demand recovery for the metals sector. Tin prices have also been pressured by the prospect of higher US interest rates and a stronger dollar which makes tin more expensive for holders of other currencies.

Fed Chair Powell's hawkish speech on (8/3/2023) sparked panic in the markets. With the possibility of a 50 basis point increase in the Fed's interest rate in March raised, the US dollar index once again hit 105.2. Data showed that the number of US initial jobless claims last week rose more than expected. Additionally the latest ADP reading increased to the 242,000 zone in February, stronger than expectations of a 119,000 gain in the labor market in the United States that could increase the likelihood of the Federal Reserve accelerating the pace of rate hikes. The market's stance on the US dollar remains strong after a series of new data suggested the Federal Reserve will keep interest rates higher for longer.

Market View

The government is starting to send clearer signals that it will postpone its policy of banning copper and tin exports in June 2023. One of the considerations is that the copper smelter project is slowing down due to the Covid-19 pandemic. Tin industry players are not ready to work on downstream products in the form of tin plate, tin solder and tin chemical. Irwandy Arif, Special Staff of the Minister of Energy and Mineral Resources for the Acceleration of Mineral and Coal Governance, explained Wednesday (8/3) that "since January 2020, nickel ore has been banned from export, June 2023 bauxite ore will definitely be banned. But (concentrate) copper, tin (tin ingot), and gold, are still in the process, depending on the policy of the leadership, the decision of the President,".

Interest rate developments with market participants' expectations of the Federal Reserve looking to raise its benchmark interest rate by a quarter of a percentage point on March 22-23 2023, as a government report showed US inflation remained high in February. Market expectations for further rate hikes have diminished sharply in recent days, but if inflation remains high chairman Powell and his colleagues will have to decide whether to keep inflation under pressure by tightening monetary conditions or wait and see if previous rate hikes start to pass through. system and reduce price pressures.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Sumber: ICDX Research