Indonesian Tin Smelters May Cut Exports by 40 Percent
Pangkal Pinang. Tin smelters in Indonesia, the world’s top refined tin exporter, could impose a monthly quota that will slash shipments by about 40 percent, the Indonesian Tin Industry Association said on Tuesday, in a move to further boost prices.
Smelters in the main Indonesian tin-producing region of Bangka island, put in place a tin ingot export stoppage on October 1, in an effort to push benchmark prices above $25,000 a ton.
Tin, mainly used in soldering for electronics, traded at $22,500 a tonne at 0343 GMT and has gained around 22 percent since its lows on Sept. 26, when the export stoppage decision was made. Throughout this month, tin prices peaked at $23,200 a tonne on Oct. 11.
London Metal Exchange tin touched a record high above $33,000 a tonne in April, but like other base metals, has fallen since.
“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,” Rudi Irawan, chairman of the association and director at independent smelter CV Stania Prima, told Reuters.
“The plan is to have a written agreement to continue or open the moratorium, led by the governor on Saturday,” added Irawan, speaking ahead of a planned smelter meeting. “If exports are opened but the price remains under $24,000, then we will agree on imposing a quota.”
Indonesian refined tin exports for January to September were 73,273.38 ton, with total exports totaling 92,487 tons in 2010 and 99,287 tons in 2009, trade ministry data showed.
”The ideal quota is 60 percent of total monthly exports,” said Irawan. “(Private companies) are able to export 3,000-4,000 tons per month… ideally, it would be around 2,500 tons per month.”
At the time the tin ingot stoppage was announced last month, industry analysts questioned whether the stoppage would last long enough to support prices.
Last week, state-owned PT Timah , the world’s largest integrated tin miner, reversed its decision from the week before to resume tin ingot exports, the firm’s chief executive said.
Timah has previously stated that it will resume exports if benchmark prices rise above $23,000 a ton.
Late on Monday, Johan Murod, general secretary at the Indonesian Tin Industry Association said the meeting would take place at the Hotel Novotel in Bangka Belitung.
In addition to deciding whether to continue the export stoppage, smelters will also discuss setting up a benchmark tin price to rival the London Metal Exchange, said Murod, who is also the director of Bangka-Belitung Timah Sejahtera, which groups five private tin smelters on Bangka island.
“We also will discuss the establishment of Bangka-Belitung tin market or Jakarta tin market,” added Murod, without giving any additional details. “The plan is to meet and discuss it on Saturday with officials from trade ministry.”