Export statistics released on 19 August showed that Indonesian shipments of refined tin declined by a more than expected 42 per cent month on month to 6,466 tonnes in July 2013. Indonesia accounts for 34 per cent of the world’s supply of refined tin, and July’s drop is the biggest decline in shipments since the 64 per cent weather-related decline in January 2012.
The 42 per cent July decline compares with an expected reduction of 24 per cent following a change in regulations by the Indonesian authorities. The changes that came into effect from 1 July 2013 required an upgrade in specifications for refined exports from 99.85 per cent to 99.90 per cent tin.
One explanation for the much more significant decline in shipments could be re-stocking by smelters after record shipments of 11,111 tonnes in June 2013. However, what remains unclear in the July numbers is the extent to which they were affected by reduced shipments from non-complying smelters.
The London Metal Exchange (LME) tin price showed little reaction to the Indonesian export announcement, suggesting that the 13 per cent rise in tin prices from US$19,300 per tonne in mid-July to US$21,854 per tonne today had anticipated the Indonesian export news. If the July numbers prove to be a precursor for a sustained reduction in exports from Indonesia, lower LME tin stocks and a higher LME tin price should be expected.