Indonesian Tin Smelters Agree to Curb Overseas Sales in Bid to Revive Price
BY :YOGA RUSMANA
MARCH 23, 2015
Twenty-two tin exporters in Indonesia including Timah, the largest shipper from the world’s top supplier, agreed to limit overseas sales to 4,500 metric tons a month starting from April to seek a return to prices of $23,000.
The agreement was reached at a meeting between the smelters and officials from the Bangka Belitung provincial administration on Monday, according to Budiman Ginting, head of the provincial tin working group. Timah will limit monthly exports to 2,500 tons and the balance will be divided among 21 private smelters, he said in an interview.
Tin was the worst performing industrial metal over the past year on the London Metal Exchange as stockpiles rose and miners in Myanmar and Australia increased supplies. The plunge had prompted Rustam Effendi, governor of the main producing region of Bangka Belitung, to propose an export moratorium to boost prices to $20,000. The proposed monthly target compares with shipments that averaged about 6,327 tons last year.
“We’ll let the ‘market mechanism’ take its course with this agreement,” Budiman said in an interview in Pangkalpinang, when asked when the price target may be achieved. “We will review this every month.”
Timah agrees with the pact, marketing director Dadang Mulyadi said at the meeting.
Tin, which lost 25 percent over the past year, traded 0.3 percent lower at $17,250 a ton on the LME at 3:29 p.m. in Singapore on Monday. Prices fell even after Indonesia tightened rules in 2013 by requiring all exports of refined ingots to be traded on a local exchange. The country imposed new quality standards starting from November.
Exports from Indonesia dropped to 5,986.4 tons in February from 6,770.2 tons in January, the Trade Ministry said March 10. Shipments slumped 17 percent to 75,925 tons last year, the lowest level in at least eight years, Bloomberg data showed.
Timah has already suspended sales of refined ingots on the Indonesia Commodity & Derivatives Exchange and halted sales of other products after prices dropped below $19,000, corporate secretary Agung Nugroho said on Feb. 13.