Global tin output may plunge 10% this year: Report
Saturday, February 17 2007 - 02:05 AM WIB
"Tin concentrate and semi-finished tin metal production from Indonesia could come down by 35,000 tons, representing some 10 per cent of global production," analyst Ahmad Solihin said in a report yesterday. The decline will also mean lower "production from neighbouring countries like Thailand and Malaysia."
Tin futures reached their highest since at least 1989 on Thursday on concern Indonesia's clampdown, coupled with tighter export controls, will disrupt supply. Tin miners have until February 22 to register for the right to export tin from the country. Only PT Timah has the right to export now.
"We have still got all the individual tin smelters shut down, so Indonesia's volumes will be way down on what was being produced there late last year," Peter Kettle, London-based manager for statistics and market studies at tin research organisation ITRI Ltd, said by telephone on Thursday.
Three-month tin futures on the London Metal Exchange rose US$100, or 0.8 per cent, to US$13,300 a tonne at 9:43am London time Friday, level with Thursday's high. The contract averaged US$8,739 last year, and US$11,592 since the start of this year.
"The supply situation will only get worse in the coming months," said Solihin, who forecast that tin futures in London would average US$12,500 a tonne this year from a previous estimate of US$11,000. He raised his 2008 forecast to US$11,000 from US$10,000.
Apik Chakib Rasjidi, who chairs Indonesia's Tin Industry Association, which represents 22 smelters, said on Thursday that as much as 60,000 tonnes of output from Indonesia could be lost this year if no more export permits were granted.
Solihin's estimate for a 10 per cent decline in global tin production was based on there being "no supply from illegal smelters and Koba Tin".
PT Koba Tin, Indonesia's second largest tin miner and smelter, has halted all production after three directors were held by police investigating illegal purchases of ore.(*)