The future of the newly launched Indonesian Tin Market is at stake after the Indonesian Tin Association (ITA) withdrew its support following the removal of the association’s top executive recently.
ITA president Hidayat Arsani said that the association had decided to withdraw its support because most of the association’s members opposed the establishment of the market, which was officially launched last week.
“About 90 percent of ITA’s 28 members denounce INATIN. We won’t sell tin to that market,” Hidayat told The Jakarta Post over the telephone on Tuesday.
The Indonesia Commodities and Derivatives Exchange (ICDX) launched last week the Indonesia Tin Market, which aims to accommodate trading on physical tin contracts. Initial transaction of tin, under the code of INATIN, will begin on Jan. 12 with each lot consisting of 5 metric tons of tin priced in US dollars. Tin futures trading will be opened for 15 minutes, from 2:30 p.m. until 2:45 p.m.
The launch was attended by deputy trade minister Bayu Krisnamurthi, Bangka Belitung governor Eko Maulana Ali, Commodity Futures Trading Supervisory Board (Bappebti) head Syahrul Sempurnajaya, and several tin companies.
During the launch, PT Timah president director Wachid Usman and ITA chairman Rudi Irawan were installed as chairman and deputy chairman of Tin Committee.
Hidayat said that the launch of INATIN ran contrary to ITA’s plan to establish a tin market under the name of Bangka Belitung Tin Market in Bangka Belitung, Indonesia’s tin producing area.
“We do want a tin market, that’s why we have mandated a team in which Wachid serves as chairman and Rudi as member to process the establishment of the market. However, we, including Bangka Belitung governor, are shocked because they established INATIN instead of Bangka Belitung Tin Market,” Hidayat said.
Hidayat said that he and several other members of ITA had previously signed an agreement for the establishment of the tin market. “However, I’ve already withdrawn my signature,” he said.
The disagreement led to the removal of Rudi, the main sponsor of the tin market, from his post last Sunday. Rudi protested his removal from the organization, saying that he had consulted with the other members of the organization’s executives in establishing the tin market.
ICDX’s head of product development Retno Manuputty said that the dispute in the ITA was an internal conflict that had no connection to the commodity bourse.
“Pro and contra inside an association are common; this is business. ICDX has coordinated with several parties, which want INATIN to go on schedule,” Retno said in an email to The Jakarta Post on Tuesday.
Retno declined to reveal which tin companies or smelters had already agreed to trade their products in the INATIN physical market despite a rejection from most members of ITA.
Hidayat also said that a voluntary ban on spot exports announced recently had been breached although it was not officially lifted.
The Indonesian producers agreed to suspend spot shipments of the metal from Oct. 1 in a bid to push prices back up to $25,000 per metric ton in a pact that was to last until Dec. 31.
The association will meet later this month to discuss the ban and measures to defend prices in 2012, he added. (rcf)