Timah to keep tin output around 34,000 tons in 2001

Timah to keep tin output around 34,000 tons in 2001

SINGAPORE (Dow Jones): Indonesia's PT Tambang Timah will
maintain its tin ingot production around 34,000-35,000 metric
tons in 2001, barely changed from last year, as tin prices have
been at an acceptable level so far, a company executive told Dow
Jones Newswires Wednesday.

"The average tin price (for long-term contracts) this year
should be around $5,300 a metric ton, which is OK for us," Timah
marketing manager Unang Rusnandi said.

The world's largest tin producer said in February that it
might trim production if tin prices showed further downward
movement.

Rusnandi acknowledged that this year's price in the physical
market has declined from that of last year, but he didn't provide
comparative figures.

The company sells over 60 percent of its annual production
through long-term contracts.

Rusnandi said Timah sees higher tin demand from Europe this
year, and may shift some production there from for the U.S.,
where slower economic growth has reduced tin demand.

"We have new buyers in Europe this year," he said.

Timah usually allocates about 22 percent of its production to
Europe and an equivalent amount to the U.S.

Asian countries, particularly Japan and South Korea, are its
biggest markets and account for half its production.

The remaining 6 percent of production is for domestic sales.

But higher demand in Europe may be capped by a weaker euro
against the U.S. dollar, Rusnandi said.

Timah is studying the possibility of delivering its tin ingots
to the London Metal Exchange once Singapore LME-registered
warehouses are allowed to carry tin in 2002, Rusnandi said.

"A major advantage to deliver to LME warehouses in Singapore
is lower freight costs," he said, adding that the company will
conclude its study by June.

Major LME-registered warehouses that carry tin are in
Rotterdam and Barcelona.

Freight costs from Timah's smelter in Indonesia to Europe are
double those from the smelter to Singapore, according to
Rusnandi.

Singapore is situated near major tin producers in Indonesia
and China.

Timah has two major brands for its tin ingot products - Banka,
with a purity of at least 99.9 percent, and Mentok, which has a
purity of 99.85 percent.

As it is a high grade, Banka is qualified to be a LME-
registered brand, Rusnandi said.

If Timah decides to deliver to the LME, it will set up a
trading arm, he added.