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Timah withholds tin sale for July to 'strategize' for higher prices
The countryâs biggest tin miner PT Timah (TINS) is mulling to temporarily stop selling tin for a few weeks in July amid lower-than-expected prices that have squeezed its finances
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T
he country's biggest tin miner PT Timah (TINS) is mulling to temporarily stop selling tin for a few weeks in July amid lower-than-expected prices that have squeezed its finances.
Timah president director Sukrisno said on Monday that the company would not start selling unless prices reached at least US$23,000 per ton.
The commodity has been traded at the London Metal Exchange (LME) at about $21,000 to $22,000 in the past few months.
Indonesia is the world's biggest tin shipper, so production here determines global selling prices.
'I said stop sales [for] one or two weeks. It's okay. At the end of the day, [the price] will increase,' Sukrisno said on Tuesday.
'But we have to prepare the cash flow because production must go on. Production must not be reduced. That's [our] strategy,' he added.
State-owned Timah recorded a lower financial performance in the first quarter of this year on the company's withholding strategy, that is expected to boost prices and, in turn, profits.
'[The company] expects the selling price of tin in the market will be boosted due to the low supply of tin [from] tin producers in Indonesia,' corporate secretary Agung Nugroho said.
'The company is still oriented toward profit rather than to [sales] quantity,' he added.
Timah's net profit dropped 25 percent to Rp 95 billion ($7.99 million) in the first quarter of this year from Rp 127 billion in the same period last year, the company announced on Monday.
It also recorded a 14 percent decline in revenue to Rp 1.2 trillion from Rp 1.4 trillion on lower sales.
Timah's sales of refined tin declined by 26 percent to 4,319 tons from 5,820 tons during the same period.
Meanwhile, the production of the product rose 8 percent to 5,148 metric tons from 4,774 metric tons.
The company's tin ore production also increased by 44 percent to 6,213 tons in the first quarter of this year from 4,312 tons in the same period last year.
Of these aforementioned amounts, overseas sales accounted for 67 percent or 4,181 tons, while domestic sales accounted for 33 percent or 2,033 tons.
Until March 31, the company still had tin inventories of 1,807 tons of tin ore, 7,377 of slag, 4,371 metric tons of refined tin and 41 metric tons of tin solder.
The total value of the tin inventories is Rp 2 trillion.
Shares of Timah traded at Rp 1,280 on Tuesday, up 1.59 percent from a day before.
The stocks have risen 18.4 percent so far this year, outperforming the broader Jakarta Composite Index's (JCI) 14.3 percent gain. (ask)
Raras Cahyafitri contributed to this story
