BEIJING (Reuters) - Tin prices jumped in Shanghai and London on Thursday after some of the world’s top refined tin producers said they would cut production this year following a recent slump in prices for the metal.
In total, producers including the world’s top two - China’s Yunnan Tin and Indonesia’s PT Timah - will reduce production by around 30,000 tonnes this year.
Estimates of global tin supply this year previously ranged mostly between 350,000 and 380,000 tonnes, meaning around 8% of supply is coming out of the market.
A group of 14 Chinese smelters, led by Yunnan Tin, said they had agreed to cut a total of 20,200 tonnes of output this year.
They made the announcement at an International Tin Association (ITA) conference in the Chinese city of Xian on Thursday, after a meeting the previous day.
PT Timah will cut an estimated 10,000 tonnes from an earlier annual production target of 60,000-70,000 tonnes for this year, Company Secretary Abdullah Umar Baswedan told Reuters in a text message.
“The number is not definitive yet” but is part of efforts to manage supply, Baswedan said.
Timah’s President director Mochtar Riza Pahlevi Tabrani was attending the conference in Xian.
Shanghai tin prices, which hit a three-year low of 127,700 yuan ($18,004.17) a tonne as recently as Aug. 26 amid weak demand in China, rose as much as 4.8% to 145,090 yuan, the highest since June 19, on Thursday before closing at 142,890 yuan.
Benchmark three-month tin on the London Metal Exchange climbed as much as 3.1% to $17,740 a tonne, the highest since July 26, before easing to $17,330 as of 1139 GMT.
The Chinese group “will take other necessary measures to safeguard the healthy development of the tin industry,” according to their statement, seen by Reuters.
Yunnan Tin is the world leader with 77,789 tonnes of output in 2018 - more than twice as much as PT Timah - according to the ITA.
In a separate stock exchange filing, Yunnan Tin said its 2019 refined output “will be reduced by about 10% compared with the annual production plan” as part of a joint initiative in response to tight supply of tin ore.
While tin prices have fallen this year due mainly to weak demand in China as its economy slowed, reduced availability of tin ore has also led to production cuts by smelters.
A company official, who asked not to be identified, said Yunnan Tin would cut about 7,000 tonnes of annual output. A Yunnan Tin spokeswoman was unable to confirm the number.
The group of 14 also included China’s Yunnan Chengfeng, which ranked fourth globally with 22,900 tonnes of output last year, as well as Jiangxi New Nanshan Tin and Guangxi China Tin.
Reporting by Tom Daly; additional reporting by Wilda Asmarini in JAKARTA and Mai Nguyen in SINGAPORE; Editing by Tom Hogue, Christian Schmollinger, Sherry Jacob-Phillips, Susan Fenton