Tin trading volumes on the Indonesia Commodity and Derivatives Exchange (ICDX) have picked up an average of over 100 tonnes per day so far this week, according to market data published on the exchange website. Indonesian tin producers have been forced to use the exchange in order to export refined metal by the new trade ministry regulation which came into force on 30 August. Total volumes in September amounted to only 795 tonnes (159 lots of 5 tonnes), or less than 40 tonnes per day. However in the first four days of this week, turnover has amounted to 435 tonnes. Until this week only one of the ICDX’s five tin contracts had been active, with all trades in the lowest quality specification (TINPB300), but there has now also been some activity in the TINPB200 contract (the contract names refer to maximum lead contents).
ITRI View: Even at the increased rate, trade through the ICDX is still only a small fraction of the volumes of some 9,000 tonnes per month tin being exported before the new export regulation came into effect. It looks likely that part of the difference will be bridged by sales of tin products such as solder wire, which are exempt from control until January 2015. It will be interesting to see the trade ministry’s export clearances figure for September due out shortly to get a first idea of the scale of this. However this regulation is still a serious bottleneck which means that at the moment Indonesian producers are worse off: the rise in world prices caused by the disruption has been nowhere near enough to offset the fall in export volumes.
