On Tuesday September 3, the London Metals Exchange (LME) tin price increased by 1.8 per cent to US$21,680 per tonne in an otherwise neutral trading day for LME metal prices. The positive tin price reaction was in response to a Bloomberg news report that mentioned 30 of 47 Indonesian tin smelters have temporarily stopped tin ingot shipments. Indonesia accounts for 34 per cent of global tin supply much of which is exported in the form of ingot.
Under new regulations that came into force on 30 August, all smelters need to meet new purity standards and also must trade tin ingot contracts on an Indonesian exchange prior to export. Confusion has arisen, because five smelters are registered to trade the INATIN contract on the Indonesian Commodity and Derivative Exchange and another 18 independent smelters have registered to trade the Serumpun contract on the Jakarta Futures Exchange. The Indonesian Commodity Futures Trading Regulator does not want to see two different prices on two different exchanges and has delayed approval of the Serumpun contract until this issue can be satisfactorily addressed. The independent smelters are meeting to find a way forward and believe that exports will be disrupted through September.
Read the full report here.