Most of China’s larger tin producers have announced production cuts in response to low prices and weaker demand.
Yunnan Tin Company, the world’s largest tin producer, said it plans to cut output by about 30% in the fourth quarter. The fall in tin prices has accelerated since October, leading to a significant decline in sales, Yunnan Tin said in a statement filed with the Shenzhen Stock Exchange. "The company will make timely adjustments to output based on changes in tin prices and sales to maximize overall efficiency," the company said. Yunnan Tin added that earnings in the fourth quarter cannot adequately be estimated due to sharp price fluctuations. YTC produced 61,129 tonnes in 2007. Its 2008 output had already been trimmed by about 3,000 tonnes in July-August, when it carried out a major maintenance shutdown of its Gejiu smelter.
Bloomberg reported that Liuzhou China Tin, the country’s second largest integrated producer, has reduced refined tin production by 100 tons to 200 tons a month and has stopped concentrate purchases of about 200 tons a month in metal content. The company will continue its own concentrate mining, producing about 800 tons a month. China Tin produced 13,193 tonnes of refined tin in 2007.
An Interfax report also quoted officials of two of the main custom smelters reporting major cut-backs. "At present, we have closed all of our tin production facilities, as current prices are too low and we will see further losses if we continue operations," an anonymous company official, from Yunnan Province-based Chengfeng Nonferrous Metals Co. Ltd., said. Chengfeng produced 18,000 tonnes of refined tin last year. "Only a small number of our tin production facilities are still running, as we started incurring losses when tin prices fell to RMB 130,000 (US$19,050) per ton," said an unnamed official from Guangxi-based Gold Bell Group, which produced 8,000 tonnes last year. Current physical market prices are reported to be RMB 98 – 103,000 ($14,360 – 15,095), roughly in line with LME values.
