Indonesia govt eyes floating more Jasa Marga shares

Indonesia's government said on Wednesday it was considering floating more shares in state-owned toll road firm PT Jasa Marga (JSMR). Source: Reuters

BUY OR SELL-Tin at all time high: Is rally sustainable?

* Tin rally fuelled by supply concerns
* Global deficit, other metals may dictate prices

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Tin prices roared to a record of $26,790 a tonne on Wednesday as the potential impact of rain on shipments from top exporter Indonesia exacerbated supply concerns in a market already struggling to meet demand this year.

Tight supplies in top tin producer and consumer China are contributing to the rally.

Three-month delivery of tin on the London Metal Exchange CMSN3 has jumped nearly 60 percent in 2010, surpassing a peak of $25,500 struck in May 2008. Then, supply worries from China and Indonesia as well as low inventories sparked speculative buying. 

But tin futures are thinly traded, so investor buying or selling can magnify movements more than in some other metals markets and a change in sentiment to the sell-side could quickly bring sharp losses.

Tin is known to analysts and traders as a "lobster pot" contract -- easy to get into, much harder to get out. But for an agile investor who keeps positions small, tin may offer opportunities.

STRONG FUNDAMENTALS REIGN

"Tin is a unique situation, where we do know there's always a supply issue," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney.

The International Tin Research Institute (ITRI) has raised its forecast of a global supply deficit for this year to 17,000 tonnes, from 15,000 tonnes previously. Tin is used in food packaging and soldering of electronics.

Developments in Indonesia could push prices higher. The ITRI expects Indonesia to produce around 95,000 tonnes of refined tin this year, down from 101,000 tonnes in 2009 as heavy rains hit mining and more easily mined onshore reserves are being depleted.

"It's all in the matter of supply-demand and control," said Barratt. "What happened in Indonesia, as we know, there's been a change, the supply is being constricted."

A crackdown on illegal mining has hit small miners this year, and their output was also crimped by a 2009 law requiring miners to obtain permits. The crackdown in the main producing islands of Bangka and Belitung started in 2006, when it sparked a rally on the LME.

"There's a shortage of tin in the market. The rainy season in Indonesia is not helping. I don't think PT Timah is going to meet its output target this year," said a physical dealer in Malaysia. Indonesia's state-run PT Timah is the world's biggest integrated tin miner.
"A weak U.S. dollar and a general interest again in resources have been pushing prices of base metals, but tin looks a lot more positive because of supply concerns and its own strong fundamentals."

Timah (TINS) expects tin output this year to be in the range of 45,000 to 50,000 tonnes, lowered from a previous forecast for 50,000 tonnes made in May due to unseasonal heavy rains in the first half of this year.

China's tin refiners have been hit by an electricity shortage, forcing the second-largest refined tin producer Yunnan Chengfeng to halt production at its Gejiu plant. Top producer Yunnan Tin recently brought forward a maintenance shutdown of its smelter.

With China using most of its locally-produced tin, consumers will turn to Indonesia and smaller sources such as Peru, Malaysia and Thailand.

LME tin stocks at 12,545 tonnes are near their lowest since March 2009.

RISKS IN ECON OUTLOOK, EXIT STRATEGY
Any change in macroeconomic sentiment or heightened concern about the strength of economic recovery could also bring down the price.

The high price may force consumers to cut back on orders, in turn reducing prices.
"I think people have bought enough tin for their consumption. Why would you buy at the high prices?" asked a physical dealer in Thailand.

High prices raise the potential rewards for Indonesia's illegal miners to run the risk of boosting supply.

"It's following the metal complex but tin is clearly the metal with the best fundamentals," said a dealer in Singapore. "The other issue is, unlike other metals, the increasing price increases the chances of unrest in Bangka."

The police crackdown in Bangka four years ago, which closed a number of smelters, led to a violent protest by miners.

Tin is one of the metals with lighter volumes on the LME, and can be prone to sharp swings when base metals market sentiment changes.

It can be a difficult market to exit to turn paper profits into cash.

In October 2009, UK-based fund Ebullio controlled almost 90 percent of LME tin stocks and cash contracts, traders at the time told Reuters.

In a report to investors in March 2010, Ebullio Capital Management said its commodity hedge fund suffered its "worst month", slumping more than 86 percent, as it liquidated positions mainly in base metals. 

Tin prices plunged to $3,620 a tonne on Feb. 20, 2002, the lowest since the LME reintroduced its tin contract in 1989 on fund liquidation and aggressive sales from producers, including Indonesia.

From 1985-1989, there was a four-year suspension in trade on the LME tin contract. Before 1985, the contract was denominated in sterling. Source: Reuters

Tin May Extend Record Rally to $28,000 Per Ton, Largest Exporter Predicts

Tin may rally to a record $28,000 a metric ton because the rainfall that disrupted output this year in Indonesia, the world’s largest exporter, will extend into 2011, according to a government official.

The advance will boost earnings for producers and increase royalty payments to the government, said Witoro Soelarno, secretary to the director-general of minerals, coal and geothermal at the energy ministry. PT Timah, based in Pangkalpinang, is Indonesia’s biggest producer. The metal traded at a record $26,790 on the London Metal Exchange today.

Tin is the best performer this year among the six main metals traded on the LME, climbing 56 percent on concern that supply disruptions in Indonesia and China will cut stockpiles. Venture Minerals Ltd., building a mine in Tasmania, has said that global shortages may last five years. Barclays Capital is predicting a 15,000-ton supply shortage next year, the biggest since at least 2003.

“Tin prices will continue to climb as the bad weather, that disrupted production, will persist until next year,” Soelarno told reporters in Jakarta today. Soelarno said on Aug. 11 that Indonesia’s output of the metal may drop about 20 percent this year to 85,000 tons because of heavy rains.

Tin, used as a solder and in packaging, has rallied from a low of $9,700 in December 2008. The metal for delivery in three months rose as much as 3.3 percent on the LME today.

La Nina

A La Nina weather event has brought heavier-than-usual rainfall to parts of Australia and Asia this year, including Indonesia, Southeast Asia’s largest economy. The rains have also been blamed by industry groups in the country for lower output or missed forecasts for cocoa, palm oil and coal.

“The situation on some metal markets such as tin is tightening considerably,” Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said in a report. “Besides enormous production problems in Indonesia and also in China lately, we are also seeing stronger stock reductions.”

Tin stockpiles tracked by the LME dropped 53 percent this year, falling to a 17-month low of 12,495 tons on Oct. 1. Exports from Indonesia declined for the first eight months of this year to 60,107 tons from 67,798 tons a year earlier, the Trade Ministry said Sept. 22.

Tin output from China may be restricted until the end of the year because of limitations on power use, industry group ITRI Ltd. said Sept. 29. A general ban on mining was also imposed last month in three eastern provinces in the Democratic Republic of Congo, Africa’s largest producer.

Timah Surges

Tin production will expand 1.5 percent to 334,000 tons next year, while demand will jump 2 percent to 350,000 tons, Barclays said in a Sept. 16 report.

“The catch-up that’s required on the exploration side is quite vast,” Venture Minerals Managing Director Hamish Halliday said yesterday in an interview.

Shares in PT Timah surged as much as 5.7 percent to 3,275 rupiah today before ending at 3,200 rupiah. The stock has jumped 60 percent this year, beating the 42 percent gain in the benchmark Jakarta Composite Index. Source: Bloomberg

JP Morgan Borong 138 Ribu Lot Saham Berau Energy

Investor asing melalui JP Morgan Securities Indonesia memborong 137.810 lot saham Berau Energy (BRAU) di harga Rp 476, tanpa menjual sama sekali. Volume pembelian ini sangat masif jika dibandingkan broker-broker lain yang hanya membeli di bawah 37 ribu lot.

Bisik-bisik di kalangan bandar yang diperoleh toko saham menyebutkan, JP Morgan sudah ditunjuk oleh BRAU untuk menangani penjualan 30% saham kepada Glencore di harga Rp 525.

Harga saham BRAU naik Rp 5 menjadi Rp 475.

1	BK	J.P MORGAN SECURITIES INDONESIA	285	137,810	476.49	-	-	-	137,810	137,810
2	PD	INDO PREMIER SECURITIES	134	37,683	474.35	87	2,421	475.00	35,262	40,104
3	KZ	CLSA INDONESIA	7	15,000	485.00	-	-	-	15,000	15,000
4	DR	NUSADANA CAPITAL INDONESIA	351	24,727	475.49	53	9,901	473.84	14,826	34,628
5	ID	ANUGERAH SECURINDO INDAH	20	10,024	477.50	4	200	475.23	9,824	10,224
86	PO	BALI SECURITIES	47	17,020	475.00	91	44,020	477.38	-27,000	61,040
87	PG	PANCA GLOBAL SECURITIES TBK.	-	-	-	176	31,532	475.24	-31,532	31,532
88	KK	PHILLIP SECURITIES INDONESIA	20	1,538	474.41	81	34,153	480.31	-32,615	35,691

Investor Asing Banyak Berburu Saham Alam Sutera

Investor asing tampak memburu saham PT Alam Sutera Reality Tbk (ASRI) sepanjang hari ini. Pembelian dilakukan melalui sejumlah broker, seperti Macquarie Securities Indonesia, CIMB-GK Securities Indonesia (50% ada investor lokal juga), ABN AMRO Asia Securities (lokal juga ada), dan JP Morgan Securities Indonesia.

Macquarie Securities memborong 84 ribu lot saham ASRI di harga Rp 225. Kemudian investor lokal melalui broker CLSA Indonesia juga memborong 75 ribu lot saham ASRI di harga Rp 223. Pembelian terbanyak dilakukan investor asing dan lokal di CIMB-GK Securities yang membeli hingga 102.795 lot.

Dari sisi penjual boleh dikatakan minim dan tidak sebanding dengan volume pembelian. Meridian Capital melepas 41.030 lot dan Ciptadana 28.262 lot. Akibatnya, harga saham ASRI naik Rp 10 menjadi Rp 230 sekaligus rekor tertinggi saham ini.

1	RX	MACQUARIE SECURITIES INDONESIA	366	84,000	225.55	-	-	-	84,000	84,000
2	KZ	CLSA INDONESIA	195	75,000	223.83	-	-	-	75,000	75,000
3	YU	CIMB-GK SECURITIES INDONESIA	376	102,795	226.08	97	58,943	220.99	43,852	161,738
4	HG	ABN AMRO ASIA SECURITIES INDONESIA	80	40,233	220.62	-	-	-	40,233	40,233
5	ZP	KIM ENG SEKURITAS	137	30,859	224.88	66	8,330	226.40	22,529	39,189
6	BK	J.P MORGAN SECURITIES INDONESIA	72	20,485	223.18	-	-	-	20,485	20,485
97	CP	VALBURY ASIA SECURITIES	64	12,075	221.74	121	33,502	226.15	-21,427	45,577
98	XC	PRIMASIA SECURITIES	-	-	-	54	25,171	224.38	-25,171	25,171
99	KI	CIPTADANA SECURITIES	7	1,860	219.92	84	28,262	224.71	-26,402	30,122
100	BM	MERIDIAN CAPITAL	-	-	-	95	41,030	220.25	-41,030	41,030

 
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JP Morgan Borong 76.760 lot saham Alam Sutera