Independent smelter members of the Indonesia Tin Association agreed yesterday to continue an export halt to the end of this year, although Indonesia’s two large integrated producers, PT Timah and PT Koba Tin, did not attend the meeting at which the decision was affirmed. The ITA is continuing discussions in Singapore today and tomorrow with international tin buyers on marketing arrangements in 2012, while plans to establish a local Indonesian tin market evolve.
Timah has been continuing to ship tin under long-term contracts and said last week that it plans to ship some 4,000 tonnes per month in November and December, while Koba has not commented publicly on its position. “All participants want Timah and Koba to stop,” Johan Murod, secretary of the ITA, told Reuters “If the two companies do not respond… people power will be used to stop them from exporting.” Murod also said that the ITA would also start a licencing system in the New Year. “After the end of December, if a private smelter is going to export, they must have a license from the ITA and the price will depend on the Babel (Bangka-Belitung) tin market.”
In response to the call, Timah Corporate Secretary Abrun Abubakar told Metal Bulletin: “We respect the concerns of the producers, and understood why they wanted us to stop tin exports to boost prices. We will try to adhere to that by postponing exports to 2012 if customers refuse the higher prices,” he added. “But on the other hand, we can’t guarantee that we will stop exports completely. If our marketing side thinks that prices between $23,000-25,000 per tonne are acceptable, we will continue supporting our customers,” he said.
The association is meeting buyers today in Singapore to discuss contracts and prices for shipments in 2012, Ismiyardi, head of the provincial parliament, told Bloomberg. The participants will include companies from the USA, Japan, Thailand, South Korea, the U., Philippines and Taiwan, said Ismiyardi, who is also commissioner of PT Bangka Belitung Timah Sejahtera, a group of six smelters. Koba Tin plans to ship 400 tonnes this month, he told reporters, citing port authority data.
In a related development the Indonesia Commodity & Derivative Exchange (ICDX) announced it will launch a physical tin contract and palm olein contract in early 2012. Material for the physical tin contract will be supplied by members of the Indonesia Tin Association, ICDX’s chief executive Megain Widjaja told Reuters. “We will be doing a Bangka Belitung tin market,” said Widjaja, adding that there would be an official announcement in mid-December. “This will be a collaboration together with the association and the exchange. We will give an exact date about when the contract will go live on December 15,” he said, adding that a tin futures contract was likely to follow later in 2012.
