The output of key Chinese indium producer Liuzhou China Tin is expected to fall to 30 tonnes or less this year due to a shortage of concentrates stemming from a series of mine shutdowns over the past few years.
Dwindling Chinese supply of indium - used to make high-tech flat screens - has sent global prices rocketing to 8-1/2 year highs of around $600 a kg from a low of $65 in late 2002.
"We were able to produce 30 to 40 tonnes last year, but that's going to be tough to match this year because the indium content in our ore is low," a China Tin official told Reuters on Friday by phone from the south-western region of Guangxi.
China Tin owns two mines in Nandan in tropical Guangxi, one of which has been shut for about two years after fatal accidents prompted the government to close all mines for safety checks.
The company, which now produces only about two tonnes of indium per month, was operating its other mine at full capacity, but the metal content in the ore was falling after years of mining only high-grade ores, company officials said.
Enquiries have been brisk amid tight supply from China, indicating that prices are expected to climb further, the China Tin official said.
"So many people have been asking us for indium, but we keep telling them we have little spot to offer. We're focusing on term contracts," he said.
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