Serumpun Tin, a group of 18 smelters, is open to the possibility of joining the Indonesia Commodity and Derivatives Exchange, in contrast to its earlier objective of selling output through a rival bourse.
The group was forced to halt sales because they wanted to trade through the Jakarta Futures Exchange which hasn’t got a permit, Serumpun Tin President Director Tjahyono Mukmin said in an interview today. Rustam Effendi, governor of Bangka Belitung, the largest producing region, will encourage smelters to join the ICDX if the legal basis is clear, he said in an interview.
Indonesia accounts for 40 percent of global exports of the metal used as solder. The country limited sales to metal handled through local exchanges from Aug. 30, curbing supply and pushing futures to six-month highs. Shipments may rise if more smelters join the ICDX, the only bourse allowed to trade the metal before export. JFX is reapplying for a license after its request was rejected, Director M. Bihar Sakti Wibowo said Oct. 9.
“We cannot prohibit smelters of Serumpun Tin if they want to trade at ICDX,” Mukmin said after meeting the governor in Pangkalpinang, Bangka Belitung. The smelters may join the exchange if the Commodity Futures Trading Regulatory Agency rejects JFX’s application a second time, he said. The smelters have 7,000 metric tons of ingots lying in warehouses that they can’t export, said Mukmin.
Tin rallied 10 percent to $23,350 a ton on the London Metal Exchange since the trading rule took effect and may extend gains to average $25,000 next year, according to Stephen Briggs, an analyst at BNP Paribas SA in London.