Discussion on SP, page-530

SHFE July contract traded as low as US$28k/t equivalent in after-hours session. That implies around US$23k/t LME cash. Strangely enough rest of commodities, including copper and iron ore, are catching a bit of a bid and staging a very modest recovery. Not so tin.

Anyways, clearly sth strange is going on. Hopefully, someone with deep industry contacts can shed some light. I've been asking around as best as I can. So far, no satisfactory answer. All I can say is that this episode has been quite the disappointment. The idea was that tin is a small and tight market with limited supply and steady price insensitive demand. Exchange warehouses were meant to be nearly exhausted with just a few days of supply. Producers sell to real end demand users. Nevertheless, it seems there are plenty of games being played in the physical market.

Tin market volatility will ultimately demand a much higher risk discount factor going forward and therefore lower valuations on companies like MLX.

Lastly, the litmus test for LMX is whether US$25k/t holds. If so, the company still provides a very decent return given current market cap.