PT Timah, the world’s third-largest tin producer, has joined other Indonesian smelters in halting shipments this month as a rule requiring ingot to be traded locally before export hampered transactions with customers.
Timah has declared force majeure since Aug. 30, when the trading rule came into force, to 19 buyers with long-term contracts, said Timah President Director Sukrisno. Five tin producers, including Timah, now trade physical contracts at the Indonesia Commodity and Derivatives Exchange.
“We have asked our buyers to be members of ICDX and in principal, they have agreed to,” Sukrisno said by phone. Timah brought forward some shipments scheduled for this month to August before the trading rule started, he said.
Indonesia, the world’s largest exporter, is trying to manage shipments and boost revenue by requiring tin to be traded domestically before export and by raising purity standards. Thirty smelters have stopped exports this month because the Jakarta Futures Exchange is still waiting for approval to trade tin contracts, Hidayat Arsani, president of the Indonesian Tin Mining Association, said yesterday.
Tin for three months delivery fell 0.4 percent to $21,500 a ton on the London Metal Exchange at 10:17 a.m. local time. Futures jumped as much as 1.8 percent yesterday on the report that Indonesian smelters in Bangka Belitung, the country’s main producing region, had stopped exports.
“Our buyers can receive our tin by becoming members on ICDX or through companies that are already members,” Timah Corporate Secretary Agung Nugroho said in mobile-phone text message. Timah has a total of 40 buyers, including for spot, and only four have registered as ICDX members, he said.
ICDX, based in Jakarta, started trading five dollar-denominated tin contracts on Aug. 30. The bourse has 12 tin members, according to the company’s statement.