Tin prices will average $20,000-$23,000 a tonne this year, the CEO at Indonesia's PT Timah said on Friday, with prices boosted from five-year lows by an Indonesian export limit that is likely to continue until the end of the year.
Last month, Indonesia's top tin miner and a group of tin smelters agreed to cap their total monthly exports at 4,500 tonnes in a renewed drive to support London prices, now trading at $16,595 a tonne and near their lowest levels since mid-2010.
"Now we reduced exports, world stocks will decline," Timah's President Director Sukrisno told Reuters, adding that he was hopeful the export quota would stay "until the end of the year".
Investors and traders are sceptical the export quota will have a big impact on the market because global sentiment is weak and previous attempts by Indonesia to crimp supplies and support prices have had little success.
Late last year, a self-imposed export slowdown backed by the Indonesian Association of Tin Exporters, new laws to close export loopholes through a domestic trading regulation, and a crackdown on illegal shipments of the metal all failed to bolster London tin prices.
Indonesia has also lost its tight grip on the global tin market as its track record of shutting off exports to try and prop up prices has pushed away buyers, with top consumer China heading to Myanmar instead.
Timah's output will not be impacted by the export quota, however, with the firm's Indonesian stockpiles likely to rise above the current 6,000 tonnes, Sukrisno said.
The state-owned firm will produce about 30,000 tonnes and export 29,000 tonnes this year, little-changed from 2014.
The global tin market will be in a deficit of 10,000 to 20,000 tonnes in 2015, said Sukrisno. That's about double what industry group ITRI said last year would be the deficit in 2015.
Still, weak tin prices and regulatory uncertainties have forced Timah to put on hold its 10,000 hectare Myanmar tin mining concession, said Sukrisno, although it is diversifying with a 1 million-tonne-per-year coal mine and power plant project on Sumatra.
Myanmar's total tin output is seen at 13,000 tonnes this year, said Sukrisno, up from 12,000 tonnes last year.
Off-shore mining accounts for 65-75 percent of Timah's operations, although the company has encountered problems introducing its new $39 million "bucket wheel" dredge that is supposed to use less power, be easier and cheaper to maintain, and mine much deeper out to sea.
"It is still being commissioned," Sukrisno added. "If successful, we will buy one or two. It is not proven yet."
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