Tin Exports From Indonesia May Drop 10% This Quarter as Rains Hamper Mines

Feb. 23 -- Refined-tin shipments from Indonesia, the world’s largest exporter, may decline in the first quarter to the lowest level in two years as monsoon rains disrupt mining, according to a Bloomberg News survey.

Exports may drop 11 percent to 20,000 metric tons from 22,568 tons a year earlier, according to the median estimate in a survey of four company executives, an analyst and a trader this week. Sales were 19,975 tons in the January-to-March period in 2010, data from the trade ministry showed.

Reduced shipments from Indonesia, which accounts for about 40 percent of global trade, may bolster this year’s 25 percent rally in London and boost earnings of producers including PT Timah, the world’s largest exporter. Rainfall in Bangka Belitung province, the main producing region, is hampering mining, according to Abrun Abubakar, corporate secretary at Timah. (TINS)

The “unexpected, strong revival in prices in January and February will stimulate supply a little in the next month or two, but obviously the monsoon will still constrain activity,” Peter Kettle, research manager at St. Albans, England-based ITRI Ltd., said by e-mail on Feb. 21. Exports may fall to as low as 18,000 tons this quarter, he said.

Exports plunged 64 percent to 5,380 tons in January from a month earlier due to the rains and a depletion of stockpiles after traders boosted shipments in December, the trade ministry said Feb. 9, citing surveyors’ data. The country shipped 96,020 tons last year.

Voluntary Ban
Tin futures plunged 29 percent last year amid concern that a return to global recession may curb demand. Producers in Indonesia including Timah agreed to a voluntary ban on spot exports from last October to December in a bid to reverse the slide in prices, targeting a return to $25,000. Tin had plunged 13 percent in August and a further 17 percent in September.

Three-month delivery tin dropped 0.6 percent to $24,050 a ton on the London Metal Exchange yesterday, declining for the first day in three.

Stockpiles of the metal used in soldering and packaging monitored by the LME fell to 9,090 tons on Feb. 8, the lowest level since March 2009. Inventories were 9,945 tons, the exchange said yesterday.

Shipments may total 5,000 tons this month, according to the median estimate from four smelters’ executives in the survey. The trade ministry may release official data for February in the second or third week of March.

“The wet weather will usually last until next month or April,” Timah’s Abubakar said. High tides in the past two months also forced miners to move dredgers to safer locations with low reserves, he said.