Indonesia, the world’s largest tin exporter, said there will be some shipments this month even as new trading rules force some producers to halt cargoes.
“It’s only been one week; there will be some exports by the end of this month,” Bachrul Chairi, director general of foreign trade at the Trade Ministry, said by phone from Jakarta today. “Everyone is still adjusting, buyers and sellers are still registering. There’s a process. Exports will drop by the end of the year, but value will increase. That the target.”
Indonesia, which supplies about 40 percent of global shipments, introduced the new regulation from Aug. 30 as part of wider efforts to increase the value of commodity exports and strengthen control over pricing. The government requires tin for export to be first traded on a domestic exchange. Futures in the metal used in everything from cans to smartphones jumped to a five-month high today on supply concerns.
Tin for delivery in three months climbed as much as 0.7 percent to $23,100 a ton on the London Metal Exchange and traded at $23,000 at 11:54 a.m. local time. The metal is this year’s best performer among the six metals traded on the LME.
Exports increased 1 percent to 6,524.7 tons last month from July before the new rule, according to data from the Trade Ministry. Shipments were still below the 18-month high of 11,111.4 tons in June and compare with sales of only 5,645.87 tons in August 2012, according to data compiled by Bloomberg.
“There will be some adjustment for the producers,” said Chairi. “If they don’t want to, they’re going to lose, they will see the benefit to prices.”
The Indonesia Commodity and Derivatives Exchange expects to add members, including two smelters, to trade tin by the end of this month, President Director Megain Widjaja, said by phone today. He declined to identify the candidates. The bourse traded a total of 205 tons since Aug. 30, including 20 tons sold at $22,925 today, it said in a statement.
To contact the editor responsible for this story: James Poole at firstname.lastname@example.org