PT Timah’s total stocks of tin-in-concentrate, slags and refined metal at the end of September amounted to only 10,063 tonnes, the lowest recorded since June 2000. While its refined metals stocks increased from 2,722 tonnes at the end of June to 3,279 tonnes at the end of September, the long-term run down of raw materials stocks continued.
Timah accumulated huge raw material stocks in from 2002 to 2007 when the Indonesian authorities first banned exports of concentrates and subsequently clamped down on private smelters’ operations. Inventories of tin in all forms peaked at 40,454 tonnes in June 2007, but have subsequently been gradually reduced by 75%. Current tin-in-concentrate inventory is only 1,273 tonnes versus a peak of over 19,000 tonnes in early 2007, while the tin content of slags has been reduced from over 18,000 tonnes in 2007 to 5,511 tonnes now.
The fact that Timah no longer has large stocks to draw on is a major factor explaining the fall in its refined tin sales this year. Sales in the nine months to September, at 29,252 tonnes, fell 20% year-on-year from 36,453 tonnes in the same period of 2009. In the same period refined tin production dropped by 12% to 29,631 tonnes, while tin-in-concentrate production (including purchases from small mines) was almost unchanged at 27,123 tonnes. Rising offshore production (which accounted for 70% of mine output in Q3) has been offset by lower ore purchases.
Timah indicated earlier this month that it will probably produce less than 40,000 tonnes of refined tin in 2010, less than its long-term contracted sales for the year. "We will not be able to fulfill some contracts but we renegotiated with the customers and they have agreed," Timah’s President Director Wahid Usman told Reuters today. The delay will affect customers from Asia Pacific countries including Japan, China and Korea, he added.
