MALAYSIAN TIN BULLETIN

JULY 2011

July Tin Market Review

Kuala Lumpur Tin Market (KLTM)
Tin prices on the KLTM during the month of July were bullish, increasing by a hefty margin. However, a couple of technical corrections which came into play prevented prices from increasing further. Tin prices for the month were generally in tandem with those on the London Metal Exchange (LME). The local physical tin market opened for trading in July at US$25,650 per tonne, but slid the following day to record the months lowest price level at US$25,550 per tonne. Thereafter, the market rebounded and traded on a positive note to end the first trading week higher at US$27,400 per tonne. During the second trading week, the market slid on technical correction before rebounding and strengthening further towards end of that trading week. Dealers said the surge was supported by strong buying interest, particularly from European and Japanese buyers. The upward momentum, however, was short lived as tin prices eased slightly during the early days of the third trading week. According to a trader, the decline was due to a retracement of gains on short covering activities and also the declining tin prices on the LME. Thereafter, tin prices rebounded and rose higher to close the week at US$27,980 per tonne. During the final trading week, the local tin market strengthened further with prices breaching the US$28,000 per tonne psychological level before ending the trading month at US$28,730 per tonne. The price was the months peak and also the highest since the month of May. The average tin price for the month of July rose to US$27,297 per tonne from US$25,627 per tonne in June. There were 21 days of trading on the KLTM in July. The average daily turnover recorded for the month of July was 51 tonnes, higher than the June average of 48 tonnes. The highest daily turnover recorded for the month was 76 tonnes and the lowest was 30 tonnes.

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LME and New York Market

Tin metal on the LME during the month of July was traded within a broad price range of US$25,640 to US$28,800 per tonne for cash tin, whilst 3-month tin was traded between US$25,610 to US$28,900 per tonne. The July average LME cash and 3-month tin prices were US$27,313 and US$27,358 per tonne, respectively. LME tin prices opened the trading month of July on a positive note. However, on the second day of trading, both cash and 3-month tin declined to record their lowest price level for the month at US$25,640 and US$25,610 per tonne, respectively on weak buying interest. Tin prices then rebounded substantially towards end of the first trading week. According to a trader, the upward momentum was bolstered by encouraging demand. Going into the second trading week, tin prices softened on technical correction during the early days of the week before rebounding strongly thereafter. The recovery was rather short lived as prices softened again as the trading week ended. Tin prices were bullish during the third trading week. The positive momentum continued well into the final trading week when tin prices breached the US$28,000 per tonne psychological level to record the months peak of US$28,800 on 27 July and US$28,900 per tonne on 28 July for cash and 3-month tin, respectively. Meanwhile, trading on the New York tin market in July was again in tandem with the trend of the LMEs tin trading. The average New York spot tin price for the month was US$28,192 per tonne. Their highest and lowest prices recorded for July were US$29,564 and US$26,455 per tonne, respectively.

News Round - Up
Slow Down in Chinas Tin Recycling Activities
Tin recycling in south China have been curtailed due to power supply restrictions and sterner environmental checks by the government. Almost all the recyclers in the Guangdong province have cut their production capacity by more than half. It was not known when normal operation would resume. Guangdong is Chinas most important province for tin recycling. Chinas total refined tin production in 2010 was 155,000 tonnes with secondary tin estimated to have constituted some 30 per cent of the total. With solder plants in Zhejiang and Guangdong provinces also being affected by power cuts as well as declining demand from the electronics sector, supply of solder scraps for

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recycling have also reduced. The sterner environmental checks on metal producers was imposed by the government following reports that residents living close to lead plants were discovered to have high concentrations of the metal in their blood. As a result, lead-acid battery plants and recyclers in Henan, Guangdong, Sichuan and Zhejiang provinces have halted production since May. According to the countrys National Development and Reform Commission, power supply remained scarce in southern China

due to the recent high temperatures and inadequate coal supply.

Indonesias June Tin Export Rose

Provisional data from Indonesias Ministry of Trade showed that some 10,875 tonnes of tin were checked for exports in June 2011, the highest monthly total recorded since March 2009. The months export tonnage was 35 per cent higher than in June 2010, and was also the fifth highest export total recorded since the licencing scheme was first implemented in February 2007. Cumulative tin export tonnage rose to 50,165 tonnes for the first half of 2011, up by 16 per cent yearon-year, mainly because in 2010 production and trade were severely impacted by unusually bad weather. The higher export tonnage in June could primarily be the result of producers releasing their tin stocks after withholding them in the preceding month due to better tin prices. Lesser rain in Bangka and the higher prices during the month had somewhat stimulated small-scale mining, which boosted tin ore feed to smelters resulting in increased refined tin output in June.

China Revised its Tin Export Quota

China has released its second set of nonferrous metals export quota for 2011. Export quota for tin and tin products under this new set was 7,097 tonnes, which constituted some 40 per cent of the annual total. Those allocated the quota were the Guangxi, Jiangsu, Yunnan, Zhejiang provinces and the Minmetals Nonferrous company. For the provinces, the local governments would dispense the quota to local companies owning export licence. The first set of export quota for 2011 was 11,340 tonnes of which some 4,745 tonnes of tin and tin products were exported during the January to May period. The higher export quota then was due to Chinese domestic prices being lower compared to the LME. However, current Chinese tin prices are much higher than the Exchange.

PT Timah Recorded Lower First Half Sales

PT Timah, Indonesias premier tin producer, recorded a decline of some 9 per cent in sales this year. It sold some 18,000 tonnes of tin during the first half at an average price of $25,000 per tonne. Last year, some 19,760 tonnes were sold at $19,000 per tonne during the same period. PT Timah aims a production target of 40,000 tonnes of tin this year as it moves its mining activities to offshore Bangka island. The move will also help to prevent illegal mining of its concession areas, said a company official.

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JULY 2011

Perus May Tin Production Declined

Latest official figures from Perus Ministry of Mines revealed that the countrys tin production in May had decline compared to the same period in 2010. Tin-inconcentrate production in May 2011 was only 2,189 tonnes, a fall of almost 25 per cent year-on-year. The countrys cumulative tin-in-concentrate production for the January to May period totalled 11,327 tonnes, a 26 per cent decline compared to the same period last year. Minsurs San Rafael mine in Puno province, the countrys sole tin producer, has been operating below full capacity since last September due to short-term restrictions on tailings disposal. This has now ended, and the mine has resumed full production of some 3,000 tonnes per month since end May. However, it still faces disruption of its ore shipments to its smelter from protestors who are against certain government policies by placing roadblocks along the route.

South Korean Partner for Timahs New Tin Chemical Plant

PT Timah, Indonesias state owned tin mining company, and South Koreas H&H Global Resource Co Ltd have recently signed an MOU to set-up a tin chemicals plant in Bangka island. PT Timah has earlier commissioned its first tin chemicals plant in Cilegon. Tin tetrachloride produced by this plant will be used as feed material for the Bangka operation. According to a PT Timahs spokesman, it is awaiting the result of a plant feasibility study expected to be completed in six months time. After completion of the study, it will take about a year to construct the plant. Its tin chemical products will be sold locally and exported.

New Indonesian Tin Brand listed on LME

The London Metal Exchange (LME) has listed the IMLI tin brand produced by Indonesias PT Bukit Timah as good delivery effective from 22 June. Bukit Timah is one of the countrys 30 independent smelters and has an annual production capacity of 12,000 tonnes located on Bangka island. The company is a wholly owned subsidiary of Indoprima Group, a holding company dealing in non-ferrous metals, mining, automotive and lead production. Prior to the above listing, Indonesias tin brands listed on the LME are those of PT Timah and PT Koba Tin, the countrys two main integrated producers. More than half of Indonesias tin metal production now comes from independent smelters where most are sent to China, Malaysia or Thailand for re-refining. Bukit Timahs smelter produces an average of 600 to 800 tonnes of tin monthly, and exports primarily to the Asia-Pacific region. According to a companys spokesman, its export to Europe is currently very small and aims to increase its market share in that region. (Source: Tin in the News, ITRI Ltd. UK)

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Tin Statistics

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