The Indonesia Commodity & Derivatives Exchange (ICDX) started trading a physical tin contract today to create an alternative price benchmark to the London Metal Exchange, after twice delaying the initiative. Bloomberg reported that two lots of 5 tonnes traded before the contract settled at $24,500/tonne. The introduction was delayed from December 15 and January 12 to allow potential users more time to prepare.
The move to set up the new INATIN benchmark was supported by the government through the Commodity Futures Trading Regulatory Agency Bappebti and PT Timah, the country’s biggest producer. “It’s about time for us as the world’s biggest tin exporter to have our own credible and reliable market,” Deputy Trade Minister Bayu Krisnamurthi said before trading began. “The path starts today to create a new reference tin price.”
There are 13 companies so far including Timah, PT Refined Bangka Tin and Noble Resources that have already registered as sellers and buyers for the new tin contract, according to a statement from the futures trading regulator. The new contract is based on an online auction system for tin certificate deposits for 99.85% tin FOB registered loading ports in Indonesia. Initially the two locations are Pangkal Balam and Mentok, both on Bangka island.
