UPDATE 1-Indonesia tin smelters may replace export ban with quota

* Monthly tin export quota may cut shipments to 2,500 tonnes

* No agreement on export quota; all eyes on Saturday's meeting

* Indonesia tin smelters want prices from $23,000-$25,000/tonne (Recasts, updates throughout, adds comment/detail)

PANGKAL PINANG/JAKARTA, Indonesia, Oct 25 (Reuters) - Tin smelters in top exporter Indonesia may end their export ban and instead impose a monthly quota that would cut shipments by up to 40 percent, the Indonesian Tin Industry Association said on Tuesday.

Smelters in the main Indonesian tin-producing region of Bangka island put in place an indefinite stoppage on tin ingot exports on Oct. 1, in an effort to push benchmark prices to between $23,000 and $25,000 a tonne.

Ahead of a smelter meeting on Saturday to discuss exports, Rudi Irawan, chairman of the association, told Reuters one option is to re-start shipments and introduce a quota that would cut exports by private firms to around 2,500 tonnes.

"Looking at the current situation, prices should be at $24,000, but it has not reached this level even though LME stocks are limited and demand remains constant," said Irawan, who is also a director at independent smelter CV Stania Prima.

"The plan is to have a written agreement to continue or open the moratorium, led by the governor on Saturday," added Irawan.

"If exports are opened but the price remains under $24,000, then we may agree on imposing a quota."

He said the the ideal quota would be 60 percent of total monthly exports, which he put at around 3,000-4,000 tonnes.

Indonesian refined tin exports for January to September were 73,273.38 tonnes. Exports totaled 92,487 tonnes last year and 99,287 tonnes in 2009, trade ministry data showed.

Details on the length of any tin ingot export quota and how it would work in practice would be thrashed out during Saturday's meeting, Irawan said.

Johan Murod, general secretary of the association, said he was against the quota idea, as it would lead to "unhealthy business competition".

Tin, mainly used in soldering for electronics, traded at $22,550 a tonne on the London Metal Exchange at 0600 GMT. The metal, which touched a record high of above $33,000 a tonne in April, has gained around 23 percent since lows on Sept. 26, when the stoppage decision was made.

Indonesia, the world's No.2 producer of the metal after China, has a track record of supply issues that often impact prices.

"The Indonesian tin industry continues its on-again, off-again policy," said David Thurtell, a Citigroup analyst. "If it is to remain credible, it must carry through with its threats.

"The price impact is likely to be positive, but if the complex is rallying, the impact might be hard to discern."

At the time the tin ingot stoppage was announced last month, industry analysts questioned if it would last long enough to support prices.

Last week, state-owned PT Timah , the world's top integrated tin miner, reversed its decision from the week before to resume tin ingot exports.

Timah has previously stated it will resume exports if benchmark prices rise above $23,000 a tonne. (Reporting by Dwi Sadmoko and Michael Taylor; Additional reporting by Yayat Supriatna; Editing by Ramthan Hussain)