As the old adage goes, “The only cure for high prices, is high prices.” The fundamentals of the tin market are showing this statement to be true. The high price in April prompted a sell-off of stocks in China. Now that the price is depressed Indonesia has ban exports hoping for a higher price.
Bloomberg reported PT Timah (JAK:TINS) will resume exports after prices rebounded, withdrawing from a nationwide ban.
Bloomberg reported the Jakarta Composite index (JCI) slid 73.55 points, or 1.8 percent, to 3,924.95.
Bloomberg reports the JCI rose 69.5 points, 1.8 percent, to 3,960.02, gaining for a fourth day.
Bloomberg reports the Jakarta Composite index (JCI) tumbled 200.44 points, or 4.9 percent, to 3,921.64.
Reuters Africa reports PT Timah (JAK:TINS) estimated its refined tin production this year at between 37,000 and 40,000 tonnes, up to eight percent down on last year.
Reduced tin production from Indonesia has had a big effect on prices for the base metal. Fearing that the high prices will encourage a wave of new production, Indonesia has stated that it will limit production to 100,000 tonnes, which could cause a larger supply deficit in 2011, boosting prices even higher.
Reuters Africa reports that Indonesia's state-owned PT Timah (JAK:TINS), the world's largest integrated tin miner expects 2011 tin prices to be between $25,000-$30,000 a tonne.
An increase in shipments of Indonesian refined tin exports reported in April was partially the result of a return to more favorable weather conditions from the first three months of this year.
As with other industrial metals, the spot price of tin is correlated with inventory levels on the supply side and the global economic recovery on the demand side. Over the last year the spot price of tin on the LME has moved from an average price last April of US $12165.8 per tonne to a current valuation of US $18695 per tonne, a gain of almost 54 percent.
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