China’s production of refined tin was below year-ago levels for the third month running in July, according to statistics published on Wednesday by the country’s National Bureau of Statistics. The slowdown reflects government measures to remove tax breaks and clamp down on illegal mining and a general shortage of tin concentrates.
Output fell by 2.3 % year-on-year to 12,686 tonnes in July, according to NBS. Production slipped 2.9 % and 0.4 % year-on-year in June and May respectively. Output in the year to date, at 86,034 tonnes, is still 7.7% up on January-July 2006, as a result of strong growth in the first quarter.
Tax breaks for metals companies with charitable status were removed on July 1. Previously, companies employing a workforce of over 35 percent disabled staff were not taxed on sales and also enjoyed value-added tax (VAT) rebates. "The new policies have increased production costs for small-scale tin smelters, as well as increased the difficulty of sourcing sufficient tin concentrate for production, leaving many companies temporarily reliant on tin concentrate stockpiles," analyst Cui Lin, from Beijing Antaike Information, told Interfax.
In addition, the government restricted electricity supplies to some smelters in July and August, particularly in Yunnan Province, further restricting production, according to Cui. A government scheme to restrain tin miners in Hunan Province, as well as the effect of monsoons on production in Yunnan Province’s city of Gejiu, have also had a negative impact on tin concentrate supply.
