Timah sees flat world tin market in 2002: Report

The world's largest integrated tin maker PT Timah , has painted a grim picture of this year's global tin market due to oversupply and the worldwide economic downturn, Reuters reported Tuesday.

Timah's President Erry Riyana Hardjapamekas said on Tuesday the world's tin supply in 2002 was seen at 230,000 tonnes, unchanged from last year, but huge stocks in the market would offset any possible recovery in prices.

"The prices will depend on overhanging stock. The overhanging stock in the market is still high, at around 34,000 tonnes, or three times above normal level," Hardjapamekas told reporters.

"The market is also influenced by the world's economy, which is not profitable at the moment," he added.

Timah, hit by plunging tin prices and rampant illegal mining, recently reported an 89 percent drop in its 2001 net profit to 36.78 billion rupiah.

The company said it expected its production to decline to 34,400 tonnes this year with sales at 33,500 tonnes. Last year, Timah said it produced 38,081 tonnes and sold 39,999 tonnes.

Tin traders have said demand has picked up gradually this year, but although it has improved from end-2001 levels, it was still far from encouraging.

While demand from the steel and chemical sectors is good, offtake is lagging from the soldering side which is the main end use for tin, they said.

Soldering accounts for some 31 percent of annual tin consumption, ahead of plating at 30 percent and chemicals at 15 percent.

Traders said there have been few signs of rationalisation fron big producers China, Indonesia and Malaysia, and this has further dampened prospects for the market.

The LME three month tin prices fell in February to a nadir of $3,620 a tonne but a still sharper fund-related decline was averted by consumer buying and the market has now recovered.(*)