Asian Tin Output May Fall 20% on Lower Price, Smelting CEO Says...

Asian Tin Output May Fall 20% on Lower Price, Smelting CEO Says

By Luzi Ann Javier

Oct. 14 (Bloomberg) -- Tin output in Asia may drop a fifth should the price fall 13 percent to $13,000 a metric ton and discourage producers from operating at full capacity, according to Malaysia Smelting Corp., the country's largest supplier.

A slump to that level will mean ``lower ore grade projects will be suspended,'' hurting global tin supply, Chief Executive Officer Mohammad Ajib Anuar said in an interview, without providing figures. Tin futures traded today at $15,000 a ton,

Indonesia, the world's largest tin exporter, may produce less of the refined metal than forecast this year on lower prices, a government official said yesterday. Tin futures collapsed 22 percent in the past two weeks on concern the global credit crunch may push economies into recession, sapping metals demand.

``There's a lot of short sellers these days because of the crisis in confidence,'' Anuar said in Manila, where's he's attending the Asia-Pacific Mining Conference. So-called short sellers seek to benefit from falling prices, borrowing assets for sale in the hope they may be repurchased later more cheaply.

The price slide ``is just temporary,'' Anuar said, adding that the metal must rise to between $18,000 and $20,000 a ton for the mining of tin ore to be viable and to get mining companies to resume production at full capacity.

Tin futures in London extended gains today, adding as much as 3.3 percent, after concerted moves by governments around the world to bail out banks and flood to global financial system with dollars boosted optimism that the credit crunch may be easing.

Ore shipments to Malaysia Smelting have declined because ``miners are scaling back'' operations in Africa, Russia and Latin America as prices decline, he said.

To contact the reporter for this story: Luzi Ann Javier in Manila at ljavier@bloomberg