SINGAPORE PT Timah Tbk, Indonesias largest tin producer, halted tin shipments and declared force majeure Aug. 30 due to a new regulation forcing producers to trade on a local exchange, corporate secretary Agung Nugroho told AMM sister publication Metal Bulletin.
Nugroho said the company will maintain the force majeure until the regulation is replaced.
Under the regulation, all 47 Indonesian tin exporters have to trade on a domestic exchange before being able to ship the metal.
Timah has been in discussions with the government to lift this rule but has yet to receive the response it is looking for.
The regulation, and ensuing halt to shipments and force majeure, will likely support tin prices in the short term, Nugroho said.
Indonesias only physical tin contract was launched by the Indonesia Commodity and Derivatives Exchange (ICDX) last year.
"We are the only one trading on the ICDX at the moment," Nugroho said, noting that 30 percent of the companys sales are normally spot based and 70 percent based on long-term deals. "Now its almost 100 percent based on long-term contracts."
The contracts previously had been based on London Metal Exchange tin prices, but now must be priced against the Indonesian Tin Exchange and ICDX price.
A version of this article was first published in AMM sister publication Metal Bulletin.