A call by Bangka Belitung province Governor Rustam Effendi for Indonesian producers to halt shipments in order to support tin prices has not received much support, according to Bloomberg. The governor told reporters today that officials planned to meet producing companies to discuss a stoppage soon.
However the producers have yet to receive an invitation from Effendi for talks, the Association of Indonesian Tin Exporters said. “A moratorium like that needs cooperation from all smelters,” Jabin Sufianto, chairman of the association, said. “With more tight checking on the origin of the goods and more attention to tin trading regulations, export volumes should decline automatically.”
PT Timah, Indonesia’s largest producer, wants full implementation of existing rules and intensive monitoring by customs office, surveyors and port officials to regulate shipments, Corporate Secretary Agung Nugroho told Bloomberg. “We have contracts, so even if there’s a moratorium we cannot suddenly stop exports, we have to meet our contractual sales,” Nugroho said.
ITRI View: We agree that the application of existing laws is the best way to control supply. The new export regulation which came into force on 1 November is already constraining sales of non-ingot tin and the authorities are also cracking down on suspected illegal operations. Customs officials recently halted a shipment of 57 containers of ICDX-traded ingots, the third such intervention this year. The last Indonesian producer sales halt was in the fourth quarter of 2011, but it broke down quite rapidly, mainly because PT Timah continued to ship tin under long term contract arrangements.
