Indonesian sales continue to run well above the 4,000 tonnes per month “cap” announced by leading producers and the governor of Bangka-Belitung in early May, but this might be a final rush before stricter controls start to take effect.
Preliminary trade ministry data based on pre-shipment checks by surveying companies showed that May exports of refined tin rose by 23% from April to 6,263 tonnes and there have been heavy sales through the ICDX in the first half of June. Cumulative sales to 16 June already amount to 4,760 tonnes, including 1,600 tonnes in the last two days at prices around or below $15,000/tonne.
The breach of the sales limit reflects the fact that it is a voluntary agreement with no enforcement mechanism and applying only to Bangka-Belitung province. Private smelters also need to raise cash now to pay mandatory bonuses to workers ahead of the Ramadan religious holiday commencing on 18 June. Additionally, from 1 August, all tin mining activities must attain “clean and clear” status by proving compliance with legal obligations, including royalty payments, preserving the environment and not overlapping with other mining areas, with 1 November set as a final deadline for approval of necessary paperwork. An increase in tin exports before the deadline is therefore predictable, but following implementation of the new rules it is likely that a number of tin producers will be forced to cease operating, resulting in an eventual decline in export volumes.
