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Tin prices set to rise on new Indonesia export regulations

Keywords: Tags  tin, tin premiums, Indonesia regulations, International Tin Research Institute, ITRI, claire hack

LONDON — Tin prices and premiums could rise in the coming months on tighter availability, market sources said.

Indonesian regulations on refined tin exports are set to tighten considerably July 1, leading to lower availability in the market and pushing prices up to levels seen earlier in the year of about $25,000 per tonne.

"Hopefully, prices have found a base. If you look at the fundamentals of tin on their own, they’re not bad at all," a sales agent told AMM sister publication Metal Bulletin.

The Indonesian government has said that exported material must have a tin content of at least 99.9 percent, and that ingots may be shipped only by registered exporters approved by the trade ministry.

Ahead of the change in regulations, Indonesian exports have been high, according to figures published by the International Tin Research Institute (ITRI). Preliminary data showed that March refined tin exports of nearly 9,296 tonnes were up 11.3 percent from the previous month.

But this is expected to change once the regulations are put in place.

"In the last few months, metal has been pouring out of Indonesia at a constant rate," the sales agent said. "(When the regulations change), it’s the lead content that will be the crucial issue. The question is, can the producers put out material with only 100 ppm (parts per million of lead)—and I think almost certainly not." This will limit the amount of tin coming out of Indonesia still further.

"I suspect Indonesian exports will plummet from now on. The other thing coming up is the conflict minerals status (of smelters)," he said. This is especially important for smelters in Africa, including the Democratic Republic of Congo (DRC) and Rwanda, where conflict-free status is of paramount importance.

ITRI is responsible for the Conflict-Free Tin Initiative in conjunction with the government of the Netherlands. It uses the ITRI tin supply chain initiative to carry out due diligence and traceability, and is already in place in parts of the DRC.

"This is going to be an interesting period. When (the price) drops, it drops like a stone, although it seems to have found a base between $20,000 and $21,000 per tonne," the sales agent said. "As time progresses, things should improve, however. Going forward, it’s a very tight market. We’ve only got to have (the global economy) turn around a bit, and the deficit in tin will show itself quite quickly."

Tin has been in surplus in recent months, he added, but this is likely to change, especially as Chinese consumers of unrefined tin may be forced to look elsewhere for feedstock following the change in Indonesian export regulations.

Metal Bulletin’s in-warehouse Rotterdam tin premiums stand at $400 to $500 per tonne for 99.85-percent material and $500 to $600 per tonne for 99.9-percent material.

A version of this article was first published in AMM sister publication Metal Bulletin.

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