SHANGHAI (Interfax-China) -- China's tin companies are still reluctant to export tin due to low export tax rebates and the revaluation of China's currency, despite record high world tin prices, said the industry.
Tin prices touched $12,800 on the London Metals Exchange on Monday on concerns about lower supplies from Indonesia, the world's second largest producer. China is the world's biggest producer of tin.
"The reduction of tin export tax rebates last September, plus the speedy revaluation of the renminbi, China's currency, has hampered exports," said an official surnamed Tang from Yunnan Tin Group, China's leading tin producing and processing company.
Tang added the company mainly exports tin products, as China still encourages high-value added aluminum product exports, with export tax rebates between 5% and 13%.
However, China removed tax incentives on exports of tin and other metals on Sept. 15 to curb a record trade surplus and encourage production of higher-value goods.
A booming electronics industry will continue to fuel China's demand for tin.
"China may have changed from a net tin exporter to a net importer last year," said Tang, although the official figures have not been released yet.
China's refined-tin output rose 15% to 138,000 tonnes in 2006 and may gain 10% this year, while its consumption has more than doubled in the past five years and may rise 17% to 140,000 tonnes this year, according to media sources.
In 2005, China imported around 5,000 to 6,000 tonnes of tin, up from 3,000 to 4,000 tonnes in 2004.
However, China's exports of tin dropped 12% in 2006 to 19,000 metric tonnes on rising domestic demand and higher export taxes.
Some sources say China may cut exports of the refined metal by 10% this year, further depleting global stockpiles that are already at their lowest since November 2005.
"Like other companies in the industry, we will decide whether to sell tin domestically or abroad depending on the price gap. Domestic prices currently seem to be fine on the stronger renminbi, but we will see," said Tang.
China supplies 42% of the raw material for making tin from its own mines, mainly in the southwestern province of Yunnan.
Yunnan Tin is the world's largest tin producer with 2005 output of 42,720 tonnes, 2.2% higher than its nearest rival, Indonesia's PT Timah. Liuzhou China Tin is the ninth biggest.
Global tin consumption expanded 9% in 2006, according to ITRI data. Demand rose to 360,000 tonnes from 330,300 tonnes in 2005, helped by electronics manufacturers. With Resource Investor.
(c) Interfax-China 2007
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