interesting articles

Some interesting articles from Basemetals.com. I think it is important to provide as much research in here as possible, both good and bad. And whilst this article paints a slightly weaker outlook for tin (I emphasise slightly), I think the fundamentals still hold for a relatively strong price of over $US20,000 a tonne for the forseeable future.

What I find also interesting is that it seems our good buddies in Indonesia are content on doing everything possible to keep tin prices rising. With China maybe slipping back to a net exporter of tin in the coming months, I wouldnt be surprised to see the Indonesians cutting supply further. Its like they have just discovered that if they decrease supply, prices go up and all I read about of late is Indonesian companies reducing output. I expect this trend to continue.

The last article, I just found amusing.



Tin May Decline as China Imports Less, Antaike Says (Update1)

By Li Xiaowei

April 28 (Bloomberg) -- Tin prices in London may fall by about 12 percent soon as the metal's rally to a record prompts China to import less and export more, according to Beijing Antaike Information Development Co.

China could become a net exporter of tin after June as the difference between domestic and global prices encourages overseas shipments, Cui Lin, an Antaike analyst, said in a phone interview from Beijing today. China has been a net importer of the metal since August 2007, Cui said.

Less buying from China, the world's largest producer and consumer, may slow a rally in tin used in soldering and food cans. The metal has climbed 45 percent this year on the London Metal Exchange, reaching a record $24,602 a metric ton April 24, on low inventories and as China and Indonesia curbed supply.

``Fewer Chinese purchases should help precipitate a correction in London prices soon, back to around $21,000,'' Cui said. ``Chinese domestic prices are reluctant to chase the London gain because physical demand is sluggish when compared with increased production.''

China imposed a 10 percent export duty on refined tin from Jan. 1 as part of measures to curb a record trade surplus and reduce overcapacity in energy-intensive industries.

The country's tin producers have ramped up operations halted during winter snowstorms, increasing domestic supplies at a time when exports were already difficult because of the tariff.

Imports Doubled

Output increased 26 percent in March to 11,412 tons, compared with a month earlier, according to data from Antaike, the research affiliate of the China Nonferrous Metals Industry Association, which advises the government.

Chinese imports of tin doubled in the first quarter to 3,740 tons, while exports slipped 95 percent to 370 tons, customs data showed. Still, the export data could be distorted as some refined metal may have been shipped out under the category of tin products to avoid the 10 percent duty, Cui said in an e-mailed report April 16. Exports of tin products more than doubled to 1,694 tons in the first three months, she said.

``The swing in Chinese trade status to net importer of tin has been a bullish development for LME prices'' as China used to be a significant supplier of tin to the global market, Gayle Berry, an analyst at Barclays Capital, said in an e-mail. ``Even given any slowdown in Chinese import volumes, providing China remains a net importer it should be supportive to prices.''

Weak Demand

China's quarterly trade surplus shrank for the first time in more than three years from January to March, because of slowing demand from Europe and the U.S., faster yuan appreciation against the dollar and rising labor and imported raw material costs.

Domestic demand for tin, half of which is used to solder electronic chips, fell as exports slowed, Cui said.

Rising labor costs ``were of particular concern,'' Cui said. ``Small electronics factories in the southern province of Guangdong were being closed down after China's new labor laws raised production costs.''

China's Labor Contract Law, introduced on Jan. 1, mandates minimum wages and severance pay, and limits overtime for workers in the world's fastest-growing major economy.

Tin for delivery in three months in London fell as much as $125, or 0.5 percent, to $23,750 a ton and traded at $23,800 a ton at 4:31 p.m. Shanghai time.



Timah reports record margins, slump in production



Release date: 28 Apr 2008



Indonesia’s PT Timah today reported another very strong quarterly financial performance, but a sharp drop in tin production. Net profit in the three months to end-March was up 55% on the same period of 2007 to Rp 487.3 billion (US$52.4 million), while the state-controlled company’s margin per tonne rose to a new record level of $7,831, more than double what it was a year ago.

The company’s tin-in-concentrate production fell by 61% year-on-year to 8,730 tonnes, reflecting the fact that last year’s production was greatly inflated by a surge in purchases from small-scale mines while all the independent smelters in Bangka-Belitung province were temporarily shut down. Production/purchases from inland mining operations in the current quarter amounted to 6,178 tonnes, 69% down on last year. The decline was partly offset by higher offshore production, which rose by 22% to 2,552 tonnes, reflecting increased dredge capacity and higher ore grades.

A run down in stocks of tin-in-concentrate helped support refined tin production at 11,523 tonnes, although this was still 20% lower than in the first quarter of 2007. Stocks of tin-in-concentrate now amount to 2,707 tonnes, the lowest level since 2005, having reached almost 20,000 tonnes a year ago.



Police repel pirate attack on Timah dredge



Release date: 28 Apr 2008



A pirate attack on PT Timah’s Singkep 17 tin dredge in the early hours of Sunday morning was thwarted by the Riau islands water police. Five of the 10 men involved in boarding the dredge are now under arrest in Batam, in northern Indonesia.

The pirates, using a high power speedboat, boarded the dredge armed with machetes with the aim of stealing tin concentrate stored onboard. However when police arrived eight of the attackers jumped into the sea and two made off in their boat.

The arrested men are now being questioned about their plans for the disposal of the concentrate. “None of them has disclosed the destination. We along with Tanjungbalai Karimun police will continue questioning them,” Riau Islands police operation chief Commissioner Syahrial Denin told the Antara news agency.