Indonesian tin exports rose to 5,379 tonnes last month, 62% higher than in July. In August 2015 exports were zero as a result of the introduction of a new export regulation and delays in issuing export licences. In the 12 months to August 2016 exports have amounted to 62,809 tonnes.
The preliminary data released to news agencies by the trade ministry today is based on pre-shipment checks performed by surveyor companies, and includes solder and other tin products as well as refined tin ingots. Solder exports have risen recently and reached 238 tonnes last month. This is consistent with recent reports that state tin producer PT Timah has increased its solder sales significantly this year.
While sales are picking up in line with rising tin prices, the Bangka Belitung provincial government is now talking about restricting supply. Bloomberg reported that province secretary Yan Megawandi said in an interview that a task force has been set up to look at “managing prices and production and how to increase revenue from tin industry”. This could involve a production halt as one of option to increase prices if needed, he said. The administration is also to form a task force to handle unregulated miners.
ITRI View: We believe that the current export regulation is already effectively acting as a quota system which is likely to keep Indonesian production and exports at 60,000 – 65,000 tonnes this year and the possible involvement of the provincial government in limiting supply appears to be an unnecessary intervention at this time.
