Tin shipments from Indonesia slumped the most in eighteen months in July, dropping more than expected to the lowest level since last August, as new purity standards in the world’s largest exporter came into force.
Shipments fell 42 percent to 6,465.95 metric tons from 11,111.38 tons in June, data from the Trade Ministry showed today. That’s the steepest drop since a 64 percent plunge in January 2012 and compared with sales of 8,298.47 tons in July 2012, data compiled by Bloomberg show. Exports exceeded the 28 percent drop forecast in a survey published July 31.
Declining supplies may help extend a rally in the price of the metal from a near one-year low in July. Sales in June jumped to the highest level since December 2011 before the new standards took effect July 1. The rules, which were not as severe as initially planned, raised the minimum tin-content limit to 99.9 percent from 99.85 percent.
The drop in exports “is more than people had expected,” said M.B. Gunawan, president director at smelter PT Stanindo Inti Perkasa. “The smelters either ran out of stockpiles after releasing them in June or they just couldn’t meet the rule.”
Tin futures for delivery in three months fell 1.3 percent to $21,655 a ton on the London Metal Exchange at 3:01 p.m. Singapore time. The metal used in soldering and packaging, which touched $18,809 on July 5, has tumbled 7.5 percent this year.
Exports may remain low in August as smelters curb sales because of low prices, President Director Sukrisno of PT Timah, the world’s third-biggest producer, said Aug. 15. Last month’s shipments were the lowest since the country sold 5,645.87 tons in August 2012.
Indonesia shipped tin to 14 countries in July, with Singapore taking 55 percent of the total, according to the ministry’s data, based on surveyors’ reports prior to shipments. Other destinations included Taiwan, Malaysia and Japan.
Exports in the first seven months of the year rose 10.5 percent to 61,477 tons, according to Bloomberg calculations.