Huge But Brief Slump in Tin Leaves Traders Scratching Heads

(Bloomberg) -- A sharp slump in tin saw the metal record its biggest plunge in a decade, before quickly recovering the loss, fueling speculation in the market of an erroneous trade or technical error on the exchange.

Metals markets were already under pressure Thursday, when tin slid almost 9% within seconds to $31,305 a ton, an analysis of trade data of the London Metal Exchange shows. That took prices down as much as 12% for the day, the most since 2011, before tin rebounded back to where it had been a few moments earlier.

“The LME notes the sharp drop in the tin price earlier today, which has since stabilized,” the exchange said in an emailed statement. “We are looking into the circumstances of the trades in question and continue to undertake enhanced monitoring in respect of the tin market more broadly. We have further options available to ensure continued market orderliness if these are required.”

Tin is the most illiquid main market on the London Metal Exchange, and is known for volatile price swings. But the scale of the move and the speed of the rebound prompted speculation among brokers that it could be due to trader error. 

Tin for three-month delivery fell 4.3% to settle at $33,921 a metric ton at 6:04 p.m. on the LME.

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