Following a strong increase in Indonesian exports in the first four months of this year, a private smelter group said the slump in prices in recent months would lead to at least a temporary drop in supplies. “Our smelters bought tin ore stocks when tin prices were at $30,000. Now that prices have fallen so much within such a short period, we are of course shocked,” Johan Murod, director at the Bangka Belitung Timah Sejahtera (BBTS), a consortium of seven independent smelters in Indonesia, told American Metal Market. “Smelters will stop buying or buy less from ore collectors, because their refined tin products can fetch less in the market. Tin ore collectors will also buy less from the miners, so miners are not motivated to mine more. Indonesian tin production will definitely fall from next month. It could fall by as much as 30%,” he said.
BBTS has a total capacity of 2,800-3,500 tpm of tin, but was producing 1,500-1,800 tpm from January to April because of the difficulties presented by the Indonesian monsoon season. Miners or tin ore collectors may keep their output now, only to release stocks when prices recover, another tin industry insider in Bangka said: “It’s already so difficult to mine ore. Miners or smelters who have earned so much profit during the first three months have no problem at all taking a break while waiting for prices to stabilise.” However a spokesman for PT Timah said that the sell off by investors would not affect its plans: “Timah is still doing alright with this price fluctuation,” he said. “We knew that tin at more than $30,000 was overvalued. The price fall now is still within our safe margin.”
