Timah cuts tin output after price rout

IDX-listed tin giant PT Timah Tbk is cutting output by as much as 50 percent after prices slumped to the lowest in almost six years, The Jakarta Post reported on Thursday.

Timah will produce 1,500 metric tons to 2,000 tons of refined tin a month starting in April, below this year?s target of 2,000 tons to 3,000 tons, Corporate Secretary Agung Nugroho said on Wednesday. The company has 6,000 tons of refined tin stockpiles, equivalent to about three months of sales, he said.

Tin is the worst performing industrial metal on the London Metal Exchange this year after sliding 20 percent amid rising supplies from Myanmar and China. Indonesian suppliers of the metal used in everything from cans to smartphones are seeking to stem the decline by restricting output while the government tightens export and trading rules to limit shipments.

?We have cut our tin ore output and that limits our ability to produce refined tin,? Agung said in a phone interview. ?If prices stay low, inevitably we have to keep reducing production,? he said, adding that Timah is operating 6 to 7 furnaces out of the 12 it owns, he said.

Futures on the London Metal Exchange slumped 11 percent in the four days through Monday to $14,550 a ton, the lowest closing price since October 2009. They rallied 7.3 percent in the following two days to trade at $15,605 on Wednesday.

LME prices now are below Timah?s operating costs of more than $16,000 a ton, Agung said. Tin should rebound to $18,000 to $20,000 in the second half of the year as more producers cut back, he said. State-controlled Timah is based in Pangkalpinang, Bangka Belitung, the country?s main mining area for the metal. (*)