4 February 2014

Wholesale purchases of tin by an unknown investor

Recently, the London Metal Exchange was shocked by the unexpected news. An investor who did not want to name the general public began to buy up futures contracts for the supply of tin raw materials. The systematic procurement policy allowed the unknown to acquire about ninety percent of all stock of non-ferrous metal. Such a volume of tin raw material in quantitative terms is equal to twenty-three and a half thousand tons of high quality tin. And the total stock of this material on the London Stock Exchange is only twenty-six thousand tons. Therefore, we can say that an unusual wholesale buyer has practically drained the tin stock of stocks. Stopped buying is not the desire of the buyer, but the peculiarities of exchange rules, which simply did not allow the unknown to continue in the same spirit. The volume of tin that could be bought up could cover the needs of the entire world industry in important strategic raw materials for at least two months. By the way, until the completion of all procedures for processing the transaction, the buyer's right to use his acquisition will be somewhat limited. An important feature of this transaction is the fact that before the full supply of purchased material, some of the requested tin, the futures holder must give the buyer a lease.

It's surprising that such a large-scale purchase did not affect the overall pricing policy of the tin market segment. In general, the important industrial raw material has risen in price by only one and a half percent. However, the ratio of the cost of the material has changed radically. For the first time, the spot price for tin exceeded the futures price limit. Discussions about the identity of the mysterious buyer continue to this day. Despite the high interest in the passport data of the stranger, reliable information on this issue in the press has not leaked. Recently, the cost of tin practically did not increase and the price index for such a metal was steadily going down, due to the excess supply in such a field. Such a high customer demand can slightly change the entrenched lull and provoke a rise in prices for tin products. Although the goals of such a sharp interest are for certain unknown, perhaps such a demand is an artificial attempt to slightly break the calm in the tin market.

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