Malaysian Tin Bulletin-May '11

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

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MALAYSIAN T IN BULLETINMALAYSIAN T IN BULLETIN M A Y 2011M A Y 2011

The tin price on the KLTM opened the trading month ofMay at US$32,140 per tonne, which was also themonths highest price level. The local physical tin mar-ket, however, closed the first trading week lower atUS$30,400 per tonne. This was a substantial price de-crease and in line with the downtrend in the price of themetal on the London Metal Exchange (LME). Traderssaid the decline was due to weak buying interest, par-ticularly from Europe and Japan. The weekss totaltrading volume amounted to 144 tonnes.

Tin prices remained somewhat flat during the secondtrading week before sliding downwards as theycrossed over into the third trading week. Thereafter,prices managed to rebound slightly before sliding againto close the trading week easier at US$28,350 pertonne. According to a trader, the decline was due to aretracement of gains on earlier short covering activitiesand was also influenced by the declining LME tinprices. The second and third trading weeks tradingvolumes were 210 and 221 tonnes, respectively.

During the fourth and final trading weeks, tin priceswere traded range bound between US$27,000 andUS$27,900 per tonne, with the former being themonths lowest price level recorded on 24 May. Thetrading volumes for these weeks were 220 and 96 ton-nes, respectively.

The average tin price for the trading month of May de-creased substantially to US$28,960 per tonne fromUS$32,530 per tonne in April. There were 20 days oftrading on the KLTM in May as the market was closedon 2 and 17 May in conjunction with the Labour Dayand Wesak Day holidays.

The average daily turnover recorded for the month was45 tonnes, two tonnes higher than the Aprils average,while the highest daily turnover was 66 tonnes on 20May and the lowest was 25 tonnes on 3 May.

May Tin Market ReviewMay Tin Market Review

Kuala Lumpur Tin Market (KLTM)


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US$26,675 to US$31,855 per tonne. The averageLME price in May for cash tin was US$28,734 per

tonne while for 3-month tin was US$28,731 per tonne.

Continuing the April downtrend, tin trading on the LMEduring the first week of May was on a decline. Weakdemand and lack of interests resulted in both the cashand 3-month tin recording their lowest price level forthe month recorded on 24 May at US$26,700 andUS$26,675 per tonne, respectively. Prices reboundedintermittently in between due to technical corrections.

Overall buying demand for tin metal in May was notencouraging. The tin price on the LME ended the trad-ing month on a weak note. Cash tin closed the month

at US$27,995 per tonne while 3-month tin closed atUS$27,950 per tonne

Meanwhile, trading on the New York tin market in Maywas almost in tandem with that of the LME. The aver-age New York spot tin price for the month wasUS$29,487 per tonne. Their highest and lowest pricesrecorded for May were US$33,003 and US$27,558 pertonne, respectively.

News HighlightsNews Highlights

Malaysia Smelting Corporation Bhd (MSC) returned tothe black with a net profit of RM28.27 million on reve-nue of RM737.87 million for the first quarter endedMarch 31, 2011. The improvement was attributable tohigher operating profits by its tin mining and smelting

operations in Malaysia and Indonesia due mainly tohigher tin prices. In the corresponding quarter last

year, MSC posted a net loss of RM29.13 million onrevenue of RM651.18 million.

(Source: The Star, 10 May 2011)

MSC Returns to the Black

LME and New York Market

Tin trading on the LME during the month of May wasrather weak. Opening at the price level of US$31,875

per tonne for cash tin and US$31,855 per tonne for 3-month tin were their respective highest price level forthe month. LME tin was traded within a wide pricerange during the month, with cash tin traded betweenUS$26,700 to US$31,875 and 3-month tin between


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Singapore-listed tin producer Malaysia Smelting Cor-poration is currently looking to acquire concessions for

three or four tin mines in Malaysia and Indonesia to tapinto strong demand from Chinas booming electronicsindustry. The company might invest up to RM200 mil-lion to increase its mining assets in the near term, MSCCEO Dato Seri Dr Mohd Ajib Anuar told Reuters in aninterview.

MSC currently operates two mines in Perak and Indo-nesias Bangka Island. It also processes tin at its twosmelting plants in Penang and Bangka, which havetotal capacity of 60,000 tonnes. We raised RM104million from the Singapore listing, and out of that weveearmarked RM80 million for financing development of

new mines, Anuar said. With that RM80 million plussome borrowing, we would have possibly RM150 mil-lion to RM200 million to look for expansion of newmines, he said, adding that potential locations wereBangka in Indonesia, as well as Perak and Pahang,two major tin-producing states in Malaysia. MSC, aKuala Lumpur-listed subsidiary of Singapores propertyand resources conglomerate Straits Trading, sold 25million shares at S$1.75 each on the Singapore StockExchange in January this year.

Tin is widely used in the electronics, food packagingand chemicals industries. Last year, MSC together

with its Indonesian subsidiary PT Koba Tin had totalrefined tin output of 45, 381 tonnes, making it the sec-ond largest producer in the world behind Chinas Yun-nan Tin, according to industry group ITRI.

MSC is adding a mining unit to raise its production by20% or around 360 tones per year, at its Rahman Hy-draulic mine in Perak from the second half of this year,Anuar said. In the first quarter ended March, MSCgenerated profit before tax of RM27 million in Malaysiaand RM22 million in Indonesia. Rahman Hydraulic,which produced 452 tonnes of tin, contributed RM16million ringgit, Anuar said, adding that the lowest tin

price level at which the industry could remain roughlyprofitable is US$15,000 US$20,000 a tonne.

China will continue to be the worlds largest consumerof tin because of the booming electronics industry. (In)Taiwan and Korea, we have also seen increased con-sumption level, Anuar said. Three-month tin on the

London Metal Exchange closed at US$28,250 a tonneon Thursday, off from a record high of US$33,600 hit in

April but up around 5% so far this year.

Global tin consumption exceeded production for thepast three out of four years. This may result in globaltin shortage and hence help to support the commod-itys price, said Ng Kian Teck, an analyst at SIAS Re-search.

RHB Research Institute, part of RHB Banking Group,said in a report that MSC was a beneficiary of high tinprices, but key risks were a fall in global tin consump-tion and increased small scale mine production thatcould lead to an over-supply in the market. MSC

shares closed at S$1.90 on Thursday. The stock hasrisen nearly 7% so far since listing in Singapore.

(Source: The Star, 21 May 2011)

MSC Eyes New Tin Mines


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News RoundNews Round--UpUp

The Government of Bolivia has decided not to proceed withits plan to take over several privately owned mines in thecountry, including the Colquiri zinc-tin mine owned by Glen-core. The mine which produces more than 2,000 tonnes of tin-in-concentrates annually is being operated by Sinchi Wayra,a local subsidiary of Glencore.

The move was aborted even though it was supported bymany unions representing workers at state owned compa-nies. However, there was opposition by eight syndicates of

Refined tin sales of PT Timah, Indonesias premier tin pro-ducer, fell by 18 per cent year-on-year during the first quarterof 2011. However, the company reported a 150 per cent in-crease in net profit over this period due to high tin prices. PTTimahs average selling price during the first quarter rose by75 per cent to US$29,695 per tonne compared to the sameperiod last year, and posted a net profit of US$39.7 million.The companys average margin per tonne of tin at US$6,970was more than double in comparison with the first quarter of2010 although the average delivery cost per tonne had alsogone up to US$22,725, an increase of 66 per cent year-on-year.The companys refined tin sales declined to 9,770 tonnes

during the quarter due to seasonal factors and the lowerstocks of metal and raw materials that the company carried atthe beginning of the year. Timahs refined tin production

The Democratic Republic of Congo (DRC) had removed itsarmy from the Bisie mine. The army was reported to haveretreated from the mine over the past one and a half monthsto allow the North Kivu provincial mining department to regaincontrol of the mine. The Bisie mine is one of the largest tinmine in DRC. The army has taken charge of the mine over

the last five years. There were allegations that they had col-lected illegal taxes on miners and were also involved in illegalmineral trade. The move has received support from GlobalWitness, an environmental and human-rights organisation,which stated that the withdrawal of the army has createdchances to begin removing the relations between the mineraltrade and the conflict.

Bolivias Nationalisation Plan Aborted

mine workers union. The Federated Syndicate of BolivianMine Workers, which represents mine workers from the pri-vate sector had even threatened to organise a strike shouldthe proposed take over went ahead.

PT Timahs Profit Rose

stood at 8,503 tonnes, a decline of 8 per cent year-on-year,while mine production of tin-in-concentrate rose by 10 percent to 8,129 tonnes. The increase in tin-in-concentrate pro-duction was mainly due to higher offshore production, whichrose by 61 per cent to almost 3,500 tonnes. Onshore produc-tion, meanwhile, decreased somewhat to 4,653 tonnes.

DR Congo Withdraw its Army from Bisie mine

The DRC plans to end artisanal mining operation in the eastwhilst encouraging large mining corporations to open upmines in the provinces of Maniema, North and South Kivu.

Malaysia Smeting Corporation Bhd (MSC), Malaysias pre-mier tin producer, intends to take over mineral concessions of

DRCs Maniema, North and South Kivu provinces fromSakima, a government-owned mining company. Once theliquidation of Sakima is completed, the DRC government will

MSC to Venture in DRC

form a joint venture with MSC to undertake mining in Ma-niema, which is the most secured region whilst mining under-

takings in the North and South Kivu will follow later. In 2010,about 15 per cent of tin produced by MSC used feedstocksoriginated from the DRC.


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Tin ore exports from DRC have plunged since April after newbuying regulations were imposed by the electronics industrygroup. Tin ore exports from the North Kivu province droppedto 21 tonnes in April from 1,148 tonnes in March whilst pro-duction from the Bisie tin mine, which was the largest in the

DRCs Tin Export Declined

region, decreased by more than 90 per cent.

A Memorandum of Understanding (MoU) was recently signedbetween the Tin Industry (Research and Development) Boardof Malaysia (Tin Board) and the ITRI. Both organisationshave agreed to encourage and promote close co-operation inthe areas of research, development, and the commercialisa-tion of tin-based technologies in Malaysia. The new partner-ship is set to boost and contribute to Malaysias strategicdevelopment of high technology industries.

The Tin Board will co-operate closely with the ITRI to imple-ment a first set of collaborative R&D projects based aroundnew materials for electronics, energy and polymer applica-tions. Practical research programmes will be organised be-tween Malaysias universities and research institutes, andITRIs laboratories in the UK. The projects will also rope inindustrial partners to ensure seamless development and tran-sition of research concepts to commercialisation.

ITRI, with its extensive global industry networks, will identifyand evaluate new technologies with potential for new tin ap-plications and its technical staff will regularly visit Malaysia todiscuss and develop these opportunities. ITRI will makeavailable to Malaysian researchers its laboratories and scien-tific archive of more than 30,000 technical papers on tin.Technical staff from Malaysia will also be seconded to ITRI tohelp facilitate the transfer of technological know-how.

The ITRI and Universiti Teknologi MARA (UiTM) has already

started collaborative projects on lithium ion battery technol-

Malaysia's Tin Board and ITRI signed MOU on Strategic Collaboration

ogy, fire retardants and tin-based fuel catalysts. The first sec-ondment of a UiTM research student to ITRI, partly funded byITRI and the Tin Board, will take place this year.

The Chairman of the Tin Board, Dato Seri Dr Mohd AjibAnuar expressed his hope that the strategic collaboration willbenefit not only the various universities and research organi-sations that are party to the initiative, but also the industrialpartners, and the global tin producing and mining community.

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

MSC announced the venture on Bursa Malaysia after a meet-ing with the DRCs President, Joseph Kabila and Minister ofMines, Martin Kabwelulu, in Kinshasa on 19 May. The Presi-dent was quoted to have stated that he wished to increasestate revenue and improve labour conditions by replacing

small scale with large scale mining operation.

Meanwhile, the US Securities and Exchange Commission willintroduce new regulation requiring US companies to revealwhether tin and other minerals or metals used in their prod-ucts could have supported the conflict in the DRC. The USgovernment has been working with the United Nations andthe Organization for Economic Cooperation and Develop-ment (OECD) to help cut all links between minerals and thearmed rebel groups. MSC will contribute by implementing atagging system managed by the ITRI to help legitimise the tinore and coltan trade in eastern Congo. The due diligence

scheme will require some US$10 million annually and will befunded by exporters and other local sources.


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Malaysian Tin Bulletin-May '11

Documents

Transcript of Malaysian Tin Bulletin-May '11