Tin May Rise to $20,000 on Indonesian Output Slump, ITRI Says
By Claire Leow
March 6 (Bloomberg) -- Tin may rise to $20,000 a metric ton
if supply from Indonesia, the world's second largest producer of
the metal, falls to less than a forecast 90,000 tons this year,
industry group ITRI Ltd. said.
``There's more upside potential than downside risk and
$20,000 tin is possible,'' said Peter Kettle, manager for
statistics and market studies at ITRI Ltd., formerly known as
the International Tin Research Institute. ``How things could go
wrong is if production would be lower than 90,000 tons,'' Kettle
said today by telephone from Indonesia where he's visiting tin
mines in Bangka Belitung province.
ITRI is funded by producers of the metal and has analyzed
the tin market for 74 years. Last month, ITRI and commodity
analysis company CRU said in a joint report that Indonesian
output will drop by about 30 percent to 90,000 tons in 2007.
Tin jumped last month to its highest since at least 1989 on
speculation that Indonesia's efforts to curb illegal mining will
crimp global supply. Inventories monitored by the London Metal
Exchange have dropped 21 percent this year to 10,190 tons.
Tin for delivery in three months on the LME gained $300, or
2.3 percent, to $13,400 a ton at 1:03 p.m. in London.
Global demand for tin may rise 4 percent this year,
compared with 9 percent last year, Kettle said.
``Last year Indonesia produced more than 120,000 tons,'' he
said. ``Now, PT Timah is the only producer that's authorized to
export and its production will be 48,000 to 50,000 tons. That's
a huge difference.''
Timah's President-Director Thobrani Alwi said Feb. 23 he
expects the metal to rise as high as $14,000 this year, and for
Timah to produce 45,000 tons of tin in 2007.
To contact the reporter on this story:
Claire Leow in Jakarta at
[EMAIL PROTECTED] .
Last Updated: March 6, 2007 08:09 EST
