The Indonesian state-run tin producer, , has released its results for the first quarter of 2018 which reveal a 23% year-on-year decline in refined tin production to 5,361 tonnes, the lowest quarterly output since Q1 2016.

Production of tin ore by the company and its partners fell 26% year-on-year from 7,494 tonnes to 5,550 tonnes in Q1. The company believes that the lower output is a temporary issue related to recent export license regulation changes and adverse weather conditions across its mining license areas. The company has previously stated a target of 35,500 tonnes of tin mine output in 2018.

The tin content of the company’s inventory of tin ore and slags at the end of the quarter rose 3% year-on-year to 11,435 tonnes. Stocks of refined tin fell 18% year-on-year to 3,198 tonnes, although they were 15% higher than at the end of 2017.

The company continues to see strong growth in its tin chemical and solder businesses with quarterly tin chemicals production increasing 43% year-on-year to 1,691 tonnes and solder production increasing 156% to 292 tonnes.

Our view: It is not unusual for Indonesian mine operations early in the year to be affected by the wet season, although we believe that changes to export regulation and the associated delays in export license renewals have had the greater impact on PT TIMAH’s output. We expect the company’s production and shipments to recover when the export license issue is resolved, although the weaker Q1 performance will likely make it difficult for the company to meet its production target of 35,500 tonnes in 2018.