Indonesia’s Timah May Curb Spot Sales of Tin to Prop Up Prices

PT Timah, the world’s third-largest tin producer, plans to reduce sales on the spot market to support prices for the metal.    

Tin prices have fallen by almost a third since February, when the metal climbed to its highest level since August last year. The decline is being fueled by concern that Europe’s debt crisis and an economic slowdown in China, the biggest consumer of metals, will erode demand.    

“Under current market conditions, we’re holding back on spot sales and only fulfilling contract commitments,” President Director Sukrisno said in an interview yesterday in Jakarta.    

Timah, which has so far committed 60 percent of this year’s production to supplying term contracts, has no plans to cut output and will build up stockpiles as spot sales slow, said Sukrisno, who goes by one name.    

The company’s refined-tin sales fell 1.2 percent to 17,236 tons in the six months to June 30, Timah said in a report on July 30. Output dropped 19 percent to 14,984 tons, according to the company, which is based in Pangkal Pinang, in Indonesia’s Bangka-Belitung islands. Timah’s tin production may climb to 45,000 tons this year from 38,000 tons last year, Sukrisno said last month.    

Tin closed at $17,900 a metric ton yesterday on the London Metal Exchange, 31 percent lower than this year’s high of $25,880 set on Feb. 8.

Bloomberg