Indonesian Tin Producer PT Timah Announces 3Q Production Increase

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Despite posting a year over year production decline through the first nine months of the year, Indonesia’s state-run tin producer PT Timah announced its third-quarter production jumped 27% on a quarter-over-quarter basis, according to a report by the International Tin Association (ITA).

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PT Timah’s tin production hit 8,898 tons in the third quarter, according to the ITA. However, production through the end of September is down 7% year over year.

However, the third quarter built on a strong second quarter, the ITA report notes, as production in Q3 rose 8% year-over-year. According to the report, “the company attributed the stronger output to investment into various tin mining technologies, both onshore and offshore.” Two projects are set for completion in 2020, according to the report, those being an Ausmelt tin smelter and a tin fuming plant.

In addition, the tin content of PT Timah’s tin ore and slag inventories is up 46% in the year to date and 5% from Q2, according to the report. Refined tin stocks rose 14% year-over-year to 4,546 tons, marking a quarter-over-quarter increase of 40%.

The tin producer has seen production growth after a slower start to the year.

“Weak production in the first half of 2018 can be primarily attributed to export license and quota issues as well as seasonal low production during the wet season,” the ITA report states. “However, there were no such issues in Q3 translating to a strong increase in tin production.”

LME tin prices hit $19,725 per ton on Tuesday, continuing a recovery after a 6.1% drop to close November, when the price fell from $16,595 per ton Nov. 20 to $18,400 per ton Nov. 28.

2018 LME tin prices. Source: LME

The ITA previously reported the global tin market in 2019 will likely switch to a 500-ton surplus from a 7,500-ton deficit in 2018, driven by weaker Chinese demand.

As we noted in our most recent Monthly Metal Buying Outlook, tin demand could contract to 357,000 tons in 2019 from this year’s 363,000 tons, while tin production will likely increase to 357,500 tons from the current 355,000 tons.

In addition, per Indonesian trade ministry data, refined tin exports dropped 42% in October compared to September’s data.

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Compared to October 2017, Indonesian tin exports fell by 33% this year. Exports fell due to restrictions on Indonesia’s only tin-trading bourse. The Indonesia Commodity and Derivatives Exchange (ICDX) suspended trading of tin ingots and tin ore trading coming from PT Surveyor Indonesia in mid-October. PT Surveyor verified around 70% of the tin passing through the bourse from January to October.

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