PT Timah may slash sales to less than 500 tonnes per month while other Indonesian producers are limited by “quota” restrictions.
PT Timah corporate secretary Agung Nugroho told Metal Bulletin that the fall in tin prices has forced it to slash sales to less than 500 tonnes per month. “The significant drop in sales will affect our cash flow and we will have to work things out with the banks with whom we have long-term relationships. Customers also don’t want to get into long-term contracts,” Nugroho added, saying the company was also not selling on a spot basis.
Another Indonesian source told MB that total exports were likely to amount to 3,500 tonnes in January and also drop in February and March, as some producers have reached the tonnage they are permitted to export over six months in letters issued by the trade ministry under the new regulation from August 2015 onwards.
The comment from the Timah executive implies an 80% cut in the state tin company’s sales. Tin sales in the first 9 months of 2015 amounted to 22,754 tonnes. In a separate interview published by the Jakarta Post last week, forecast production in 2016 was put at 30,000 tonnes. We would guess that any cut in sales will be short-lived. Nevertheless Q1 sales from Indonesia are likely to be quite low, due to the combination of low prices, monsoon weather and the new export regulations.