market participants are expecting an uncertain summer as new
export regulations go into effect in Indonesia.
government has decreed 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
"I think the brunt of
the effect will come by the end of August (after Ramadan)," a
trader told AMM sister publication Metal
Bulletin. "I think every ounce of primary tin probably
left Indonesia by June 30," before the regulations went into
effect July 1.
The question is how
the new regulations will be enforced, as it is possible some
companies will try to circumvent them, the trader said. "They
could find creative ways of honoring long-term contracts,
although Ive seen no evidence of that yet."
The new export
regulations have already had an effect on tin prices on the
London Metal Exchange, climbing July 2 from an opening price of
$19,711 per tonne to an official price of $20,270 on a
(changes) were well expected, they have moved tin. Its
gone up about $600. It had been rumbling along the bottom
(previously)," a second trader said. "Over the next month or
two, we will see how much the regulations affect 99.9-percent
material. It could well cut exports by 50 percent."
Indonesian tin exports
in the first five months of the year jumped 18 percent from the
same period last year, according to the second trader. "At the
end of July or the beginning of August, we will start to see
whether any material comes out from other sources (instead of
Indonesia)," he said. "I think the smaller producers (in
Indonesia) will struggle with cash flow, and that means the
export rules could become hard to enforce."
A version of this article was first published by AMM sister
publication Metal Bulletin.