Tin shipments from Indonesia for the month of July are set to contract the most since January, with at least 16 of 47 Indonesian smelters being forced to curb production after a police campaign against illegal mining disrupted ore supplies. Indonesia is the largest tin exporter in the world.
This latest news could continue to impact the predicted global tin shortage for 2014. A Bloomberg survey published on July 4 showed that exports from Indonesia in 2014 are set to decline to the lowest in eight years, as the Indonesian government prepares to introduce rules to ensure accurate cargo declaration by setting standards of quality, packaging, shape and size. Sales may drop 13 per cent to 80,000 tonnes this year, the survey showed.
In an interview with Bloomberg News on July 23, Agung Nugroho, corporate secretary at PT Timah, Indonesia’s biggest tin producer, expects the tin prices to rise to US$24,000 on the Indonesian Commodities and Derivatives Exchange (ICDX) by September if the government closes the loopholes for lower-grade exports.
“We’re not satisfied as the price hasn’t reached the level we wanted because of the high exports.
“Sales will probably tumble 35 per cent to 8,000 tonnes this month from 12,377 tonnes in June, as output declines about 40 per cent,” Mr Nugroho said.
This will have an impact on the global market, which is expected to have a deficit of 13,000 tonnes this year and 10,000 tonnes in 2015. These deficits are expected to push the tin price on the London Metals Exchange (LME) to US$25,000 per tonne as soon as the third quarter this year and US$27,000 by mid-2015, a spokesperson for BNP Paribas SA said earlier this year.
Tin traded at US$22,400 per tonne on the LME on July 25.