malaysian tin bulletin-august '11

8/4/2019 Malaysian Tin Bulletin-August '11

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MALAYSIAN T IN BULLETINMALAYSIAN T IN BULLETIN A U G U S T 2011A U G U S T 2011

The KLTM opened the trading month of August atUS$28,100 per tonne, which was the months highestprice level. The market, however, closed the tradingmonth much lower at US$23,500 per tonne.

The August average tin price was US$24,315 pertonne, lower as compared to the July average ofUS$27,297 per tonne. Tin was traded within a broadprice range of US$22,500 to US$28,100 per tonne dur-ing the month. There were 21 days of trading on theKLTM in August.

The August average daily turnover was 45 tonnes,slightly lower than the July average of 51 tonnes. Thehighest daily turnover recorded for the month was 65tonnes, and the lowest was 20 tonnes. They were re-corded on the 10th and 12th August, respectively.

Trading on the KLTM during the first trading week ofAugust was weak. The market drifted all the way downto record the months lowest at US$22,500 per tonneon 9th August.

The market rebounded during the second tradingweek, and the uptrend lasted until the second day ofthe third week. According to a trader, the rebound wasdue to positive buying interest, limited supply and tech-nical correction. The incline was also influenced by theincrease in the tin price on the LME. For the remainderof the third trading week, the local market fell sharplyfollowing overnight leads on the LME.

Tin prices during the fourth trading week were gener-ally strong except for some technical correction duringthe fourth day of the week. Prices rose further towardsend of that week, which was attributed mainly to higherdemand.

The KLTM was closed for two days during the finaltrading week for Hari Raya Aidilfitri and the NationalDay.

August Tin Market ReviewAugust Tin Market Review

Kuala Lumpur Tin Market (KLTM)


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and ending the week on a higher note.

The positive uptrend during the second trading weekdid not last long as in the third week tin prices tumbledall the way through to the first day of the fourth tradingweek to record the months lowest level of US$23,100per tonne for cash tin and US$23,200 per tonne for 3-month tin on 22nd of August. According to a trader, thedecline was due to profit taking activities by investmentfunds, which took advantage of the earlier high prices.

Thereafter, tin prices moved upwards until end of themonth. The up-trend, however, was somewhatchecked on 24th August when the market declined dueto a technical correction.

The August average LME cash and 3-month tin priceswere US$24,419 per tonne and US$24,485 per tonne,respectively.

Meanwhile, tin trading on the New York market in Au-gust again followed a similar trading pattern as on theLME. The average New York spot tin price for themonth was US$25,103 per tonne. The highest and low-est prices recorded for the month of August in NewYork were US$29,255 and US$23,611 per tonne, re-spectively.

News HighlightsNews Highlights

Tin producer Malaysia Smelting Corp Bhd (MSC)posted a higher net profit of RM36.3mil in the secondquarter ended June 30 compared with RM7.98mil ayear earlier due to higher profit from its tin mining and

smelting operations in Malaysia and Indonesia as wellas higher tin prices. Revenue for the period rose toRM853mil versus RM623mil while earnings per sharewere 36 sen against 10.6 sen. The group had pro-

posed an interim dividend of 12 sen per share less25% tax per share payable on Sept 28.

Meanwhile, at a media briefing yesterday, group chief

executive Dato Seri Dr Mohd Ajib Anuar said thegroup was hoping to acquire new and existing minesprojects in Malaysia and Indonesia. We are hoping toget the approvals and getting the licences for some of

MSC Posts Higher Profit

LME and New York Market

Tin trading on the LME opened the month of August atUS$28,560 and US$28,650 per tonne for cash and 3-

month tin, respectively, which were their respectivehighest price level for the month.

During the first trading week of August, tin prices de-creased substantially to end the week at a much lowerlevel than the opening. Prices then slid further as theymoved into the second trading week, before zigzagging


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Indonesia, the worlds top refined tin exporter, will im-pose a new royalty charge on all tin shipments andonly allow the export of refined tin, a trade ministry offi-cial said yesterday, a move that is expected to lendsupport to weakening global prices. South-East Asiaslargest economy, which supplies about 30% of theworlds tin consumption, expects to produce 90,000tonnes of refined tin this year, up from 78,965 tonneslast year, on expectations of improved weather condi-tions.

Every exporter will have to pay royalty before they canship the metal, Deddy Saleh, director general of for-eign trade at the trade ministry told reporters. We arepreparing a new regulation on tin export as an amend-ment to the existing trade minister decree. It is almostfinal actually.

Under the new rule, the government would not allowexport of raw tin ore and concentrate and would onlypermit refined tin shipments, Deddy added. Only tinwhich (has) its royalty paid by exporters can beshipped for export, Deddy said. This is seen to beconsistent with the governments policy to stop non-

value added raw material exports within the next threeyears. Trade ministry officials were unavailable to givefurther details on how the royalty payment will be cal-culated and paid.

At mid-session yesterday, benchmark tin on the Lon-don Metal Exchange (LME) was at US$24,050 a tonne,up from US$23,605 at the close on Thursday. Tin,

the mines this year and some next year, he said, add-ing that the mines were not that big in size and capableof producing 100 to 200 tonnes per month.

As for the second-quarter results, Mohd Ajib said thegroup expected the overall performance to remain prof-itable in the second half of 2011 despite the currentmarket volatility and uncertain short-term outlook. Healso said MSC was optimistic about the long-term pros-pects of the tin industry and believed that the groupwould be able to capitalise on the strong global tin mar-ket fundamentals to expand its business.

(Source: The Star, 11 August 2011)

used in electronics, plating and lead-free solders,struck a record high above US$33,000 in April. Acrackdown on illegal mining, tighter export regulations,declining onshore reserves and rain that had hinderedproduction in Indonesia have helped drive the tin rallyearlier this year.

We have seen Indonesian policy having a significantimpact on tin in recent years, notably with the clamp-down on illegal tin mining constraining tin ore/concentrate shipments over the past year and a half,

said David Wilson, analyst at Societe Generale in Lon-don. Further cutbacks in ore/concentrate exports canonly be supportive for prices, as it would impact on re-fined production levels.


Indonesia to Impose Tin Export Royalty, Ban Ore Shipment


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News RoundNews Round--UpUp

Indonesia has no plans to change rules on royalty pay-ments of refined tin exports, Sri Nastiti Budianti, exportdirector of mining and industry products at the TradeMinistry, told reporters yesterday.

The country would charge royalties for domestic tradeof tin and would check shipments for origin and desti-nation to prevent illegal exports, she said. Indonesiahas since February 2007 required tin exporters to paya royalty before shipping the metal overseas, and al-

Japans recent official trade data showed that the after-effect of the recent earthquake and tsunami, which hitJapan last March, only began to impact the countrysrefined tin imports much later in June. Just 1,932 ton-nes of tin were imported that month after imports sus-tained quite well in April and May. This was a decreaseof 43 per cent compared to June 2010 imports. Thecumulative imports for the first half of 2011 decreasedby 11 per cent to 15,141 tonnes from the high importsduring the same period the previous year.From analysis of imports by a Japanese trading com-pany, tin imports from Thailand during the May andJune period, showed a decrease of almost 60 per centcompared to the same period last year. For the firsthalf of 2011, Thailand recorded a market share of such

Indonesia's Ministry of Trade revealed that the coun-trys exports of refined tin in July rose by almost 5 percent to 9,266 tonnes from 8,870 tonnes exported dur-

ing the same month last year. Total tin exported for theJanuary to July period this year was 59,430 tonnes, anincrease of 14 per cent from the same period in 2010.

These figures came from checks made prior to ship-ment under the countrys export licence system. It isexpected that the exports figure for the month of Au-gust will be much lower as demand from private smelt-ers has been declining in response to the recent dropin LME tin prices.

Meanwhile, a report released on 12th August statingthat Indonesia was planning to either increase taxes orrestrict exports on tin caused a sharp rise in LME tin

prices. However, government officials later denied thatno such changes were contemplated. The changeslikely to be made were for domestic sales only. The

No Change in Tin Royalty Rules

lows only refined tin to be exported.


Lower Japanese Tin Imports in June

imports of 34 per cent compared to Indonesia at 48 percent and Malaysia of only 10 per cent. The rest werefrom China, Vietnam and Bolivia.

Indonesia's July Tin Exports Rose

ban on tin ore exports is already Indonesias long-standing policy.

The tin ore exports ban was introduced in 2002 todampen illegal mining, and to encourage the refiningand value-added processing of tin locally. This policyhas resulted in the establishment of over 30 privatesmelters, which process ores obtained from local small-scale miners.Indonesias Ministry of Trade is considering introducinga local royalty on trade between provinces within thecountry. This new royalty could affect small volumes oftrade in metals and ores shipped from the Bangka Beli-tung province to Java and other parts of Indonesia. Forthe international market, Indonesia already collects a 3per cent royalty on tin metal exports.


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Chinas July Tin Output and Imports Decline

According to the China Nonferrous Metals Industry As-sociation (CNIA), the countrys refined tin output de-clined by 8 per cent to 12,096 tonnes in July comparedto the same month last year. Cumulative productionfor the January to July period, however, increased byalmost 7 per cent from the same period in 2010. The

Hunan and Guangxi provinces recorded the biggestincrease. Chinas tin-in-concentrate output also in-creased by 17 per cent to 53,031 tonnes for the Janu-ary to July period compared to the same period lastyear.

Meanwhile, data from Chinas Custom Departmentshowed that the countrys refined tin imports in Julydeclined by 47 per cent to 721 tonnes from the samemonth in 2010 despite Chinas domestic tin price thatmonth being higher than the LME. This was becauselocal traders would have to pay 3 per cent import dutyand 17 per cent VAT on such imports. Thus, it wouldnot be profitable to import tin metal for general trade

locally. In addition, the large swing in LME prices alsoposed huge business risk as they would not be able tohedge their purchases in Chinas domestic market.The same situation also impacted Chinas tin concen-trate imports. The country imported some 171 tonnesof tin-in-concentrate in July, which was much lowercompared to June. However, it is expected that thissituation will only be temporary as the domestic pricepremium over the LME has since risen to a recordhigh, which now makes importing very lucrative, evenfor general trade. Imports of tin ores is expected to re-

bound in August.

The Customs data also showed that no refined tin wasexported in July although for the January to July periodsome 973 tonnes of refined tin were exported. How-ever, from incomplete import data of third countries, it

is shown that China exported some 16,000 tonnes oftin metal from last October to May this year. It is be-lieved that the country has ended its tin de-stockingactivity as there is no price incentive to do so and noexcess material left, and that Chinas tin imports islikely to rise for the remainder of this year.

(Source: Tin in the News, ITRI Ltd. UK)

Korea Building-up its Tin Stockpile

South Korea's Public Procurement Service (PPS) re-cently reported that it had purchased 300 tonnes of tinfor delivery in early November from LG InternationalCorporation. The tin purchased was on a cost, insur-ance and freight basis at a premium of $577 per tonneto the London Metal Exchange tin price.

PPS is a state agency entrusted with the stockpiling ofcommodities. In recent years, it has stockpiled some2,000 tonnes of tin to meet the needs of small and me-

dium-sized manufacturers who are consumers of themetal. PPS was reported to be planning to increase itsstockpiling of tin and other metals due to expectedshortages in the supply of these commodities.


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malaysian tin bulletin-august '11

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