Timah May Curb Spot Sales of Tin to Prop Up Flagging Prices
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 ongoing debt crisis and an economic slowdown in China, the biggest consumer of metals, will erode demand for the metal.
“Under current market conditions, we’re holding back on spot sales and only fulfilling contract commitments,” president director Sukrisno said in an interview in Jakarta on Friday.
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, Sukrisno said.
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 last Monday. Output dropped 19 percent to 14,984 tons, according to the company, which is based in Pangkal Pinang in the Bangka-Belitung Islands.
Timah’s tin production may climb to 45,000 tons this year from 38,000 tons in 2011, Sukrisno said last month.
Tin closed at $17,900 per metric ton at the London Metal Exchange on Friday. That’s 31 percent lower than this year’s high of $25,880 set on Feb. 8.