Refined-tin shipments from Indonesia, the world’s largest exporter of the metal, climbed 5 percent in May from a month earlier as the country is entering peak production season.
Exports gained to 7,866 metric tons last month from 7,489 tons in April, according to data released today by the Trade Ministry. Sales were 7,013 tons in May last year.
Prices have declined 22 percent from a 6-month high in February on concern the debt crisis in Europe and China’s economic slowdown may erode demand for the metal used in soldering and packaging. Lower prices may help to ease revenue at producers including Malaysia Smelting Corp. (SMELT) and PT Timah (TINS), the world’s second and third-largest producers.
“We should be into the peak season for production and exports now, although the price below $20,000 must have some adverse impact on small-scale production,” Peter Kettle, a research manager at St. Albans, England-based ITRI Ltd., said by e-mail. “Most of them should still be covering cash costs at current prices,” he said, adding that shipments may reach 7,500 tons to 8,000 tons this month.
Indonesia represents about 40 percent of global tin exports, according to ITRI. The ministry’s data released today was based on reports from surveyors prior to shipments.
Exports in the first five-months of the year fell 4 percent from a year earlier to 37,668 tons, according to ministry data compiled by Bloomberg News.
“Business in most parts of the world seems to be OK,” Kettle said. “The main relatively weak area seems to have been the China solder business, especially for domestic appliances. However, China seems to be continuing to import quite large volumes of tin, which may reflect mine supply problems there.”
Global demand for tin is expected to climb to about 363,000 tons to 365,000 tons this year from 359,500 tons last year, Kettle said.
Three-month delivery tin rose 0.5 percent to $19,800 a ton on the London Metal Exchange at 5:00 p.m. Jakarta time.
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