Apr 01

1 April 2009
Most of this week’s report is news generated by PT Timah. Profitability and tin production has been reduced sharply from the fourth quarter of 2008, but the state-controlled company is devoting a significant proportion of its capital spending towards production of tin chemicals. The other story concerns the huge drop in tin imports by Japan in the first two months of this year. Japan has probably been hit harder than any other major national market by the global recession, due to its dependence on exports and the strength of its currency.
As always comments and news are welcome

Peter Kettle
31 Mar 2009 Timah considers second tin chemicals plant
With one 10,000 tpy capacity tin chemicals plant already under construction in Java, PT Timah is already considering building another unit in west Bangka, Corporate Secretary Abrun Abubakar told Bisnis Indonesia yesterday.

Construction of the Cilegon, Java plant commenced in January and production of tin stabilisers is due to commence in the first quarter of 2010. The Rp 250 billion project to produce organotin PVC stabilisers accounts for a third of the company’s total planned capital expenditure this year.

Timah may construct a second, larger plant in West Bangka if market conditions are favourable. The company is currently carrying out an environmental impact study for a 20,000 tpy capacity operation there. Timah estimates that the world market for tin chemicals is 150,000 tpy (gross weight) and growing.
30 Mar 2009 Japan tin imports plummet
Japan’s imports of refined tin have dropped sharply in the first two months of 2009, as consumption has been badly affected by the global economic recession coupled with the strength of the yen. Imports in February amounted to only 1,210 tonnes, 60% lower than in February 2008. Cumulative imports in January-February fell 49% year-on-year to 3,122 tonnes.

The main sources of tin in January-February were Indonesia (1,831 tonnes, or 59% of the total) and Thailand (946 tonnes, 30% of the total).
30 Mar 2009 Timah confirms earnings slump
Indonesia’s state-controlled tin producer PT Timah today released audited financial results which showed that its net earnings fell by 25% in 2008 to Rp 1,342 billion (US$141 million). The company made a small net loss of Rp 149 billion ($13 million) in the final quarter of the year following the slump in global tin prices. In a statement the company said that the fall in tin prices had forced it to postpone a new tin exploration programme and review its plan to diversify into non-tin businesses.

The company’s revenue in 2008 reached Rp 9,053 billion, 6% higher than in 2007. Refined tin accounted for 91.5% of consolidated revenue, while the sales of coal contributed 8.2%, the minor balance coming from dockyard, exploration and workshop services. As previously reported, refined tin sales fell by 21% in volume terms last year to 46,434 tonnes, while refined tin production dropped by 16% to 49,029 tonnes. Mine production (including purchased ore) fell by 19% to 47,074 tonnes of tin-in-concentrate, although offshore production rose by 15% to 13,840 tonnes, accounting for 29% of total output.

Production costs fell in the final quarter of the year as ore buying prices and fuel costs declined and the rupiah depreciated. Average costs in the period were reported at $13,364/tonne, while the average for the year was $13,390/tonne.

Timah continued to reduce its inventories of concentrate, slag and refined tin in the fourth quarter, but these still amounted to a combined total of some 26,000 tonnes tin content at the end of the year (of which 7,160 tonnes was in the form of refined metal).

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