I am a huge fan of commodities as an asset class. The ongoing industrialisation of emerging markets such as China offers investors who are patient the chance to make big gains. But recent activity in the tin market offers a valuable warning to anyone looking for a quick buck.
According to the Telegraph, a single investor probably a hedge fund has cornered the market in the metal. It owns thousands of tonnes of the stuff, say traders, and is estimated to control up to 90% of all physical tin stocks. The mystery investor is almost certainly gambling on a supply shortage caused in part by Chinese demand after Beijing doubled imports of tin this year to drive up prices further and increase the value of the holding.
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