Timah 2001 output seen at 36,000 tons

State-owned PT Timah Tbk, the world's largest integrated tin maker, said yesterday it targeted to produce 35,000-36,000 tons of refined tin in 2001, about the same level as this year.

"Our tin output will be steady at between 35,000 and 36,000 tons next year. No less and no higher than that," Erry Riyana Hardjapamekas, Timah president director, said in an interview.

"We have no plan to increase output because demand is expected to be steady next year."

World tin consumption was seen at 200,000 tons in 2000, Hardjapamekas said.

Hardjapamekas said last May that Timah would produce only 35,000 tons in 2000 from 40,000 tons in 1999 in order to save reserves.

He said steady demand next year would also keep tin prices at between US$5,000 to US$5,500 a ton.

"Tin prices are likely to stay at US$5,000-US$5,500 as no improvement is seen in tin demand next year," Hardjapamekas said.

Uncertainty over China's plan to reduce tin exports would also weigh on the market next year and keep prices steady, Hardjapamekas said.

China, the world's largest tin producer, made 81,869 tons of tin-in-concentrates in 1999 and exported up to 55,000 tons, according to traders.

This year's output is expected to stay the same but there has been speculation China would trim exports.

"I don't think China will cut exports. My forecast is China's exports will be unchanged," Hardjapamekas said.

Premiums seen at US$60-$150 a ton

With no improvement in demand and relatively steady prices, premiums next year are expected at between US$60 and US$150 a ton under the London Metal Exchange (LME) and the Kuala Lumpur Tin Market (KLTM), Hardjapamekas said.

"Premiums next year will stay at the same range with this year," he said.

Hardjapamekas said no improvement in demand would not pose any threat to Timah, as most of its output had already been ordered. "We are not worried at all, our output will still have consumers," he said.

He said most of the company's tin was sold on contract with a very 'insignificant' portion sold on spot.

Timah's first-half profits this year jumped to Rp250.1 billion (US$28.5 million) from Rp182.2 billion a year earlier, mainly due to foreign exchange gains and asset sales.

The company's sales fell to Rp771.5 billion during the period from Rp968.2 billion. Its sales volume in the first half was 19% lower than in 1999, due to lower production, partly because the number of inland mines fell to 241 from 285.

The company has also been hit by illegal mining and disputes with locals.

But Hardjapamekas said the company was optimistic its operations would not be disrupted by those problems. "God willing, we are able to handle all of these problems," he said. (*)