Indonesia, China suspected of causing drastic hike in tin stocks

Indonesia has been suspected of causing a rise by more than 30 percent in tin stocks on the London Metal Exchange (LME) over the past few days, Reuters reported Thursday.

Tin stocks were quoted at 25,145 tons on Wednesday, up from 19,170 tons last Friday, due to the arrivals of new metal in the LME warehouse in Singapore. The city state became an Asian delivery for LME tin last year.

?I suspect Indonesia is responsible for this because they have excess concentrates,? the news agency quoted one trader as saying in Singapore on Thursday.

Other traders said China could have been behind the sudden rise in tin stocks. Indonesia and China are the world?s largest tin producers.

Traders said that the stock hike could dampen hope of a price recovery on the LME, where the metal lost US$25 a ton to close at $4,525 on Wednesday. They had expected LME tin price to touch $5,000 soon, a level last seen in early 2001, driven by prospects of a supply deficit of up to 25,000 tons this year.

Meanwhile, a source with Indonesia?s PT Timah Tbk, the world?s largest integrated tin miner, said the company was also in the dark over the increase.

?We want to find out. We have been hearing talk that Indonesia was behind this,? the source said.

Standard Bank said the substantial hike in stock was due to a delivery of Chinese metal in Singapore, while a source from LME warehouse in Singapore believed the stock hike could be due to a relocation of off-warrant LME tin. The LME has warehouses in 26 other locations, including Antwerp, Rotterdam, Los Angeles and Barcelona.

Timah told Reuters on Tuesday that its refined tin output could reach 40,000 tons in 2002, up from 38,081 tons in 2001 because it had to buy excess tin concentrates from local miners on Bangka Island, off Sumatra island, after the government imposed an export ban last year to quell illegal mining. (*)