The Indonesian Commodity & Derivative Exchange (ICDX) and the Indonesian Tin Association (ITA) will establish a physical tin market on December 15 that may become operational as early as January next year, ITA spokesman M Fitriansyah told American Metal Market. “While the official launch will be in December, the ICDX and ITA are still setting up the system and regulations for the marketplace. It will start operating in January 2012 or later.”
Once operational, the Bangka Tin Market (BTM) will exclusively trade tin produced in Bangka, setting prices daily according to demand and supply. “It’s a very simple concept. The BTM will announce prices at 2.00pm local time daily. If demand falls during the day, then the BTM will adjust prices down accordingly for the next day’s price. And if demand rises, then the BTM will increase prices for the next day,” Fitriansyah said.
“Every tin producer will have its own business strategy. We expect tin production to fall in 2012 when the BTM starts operating, as suppliers will want to tighten supply and improve prices,” he added.
