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Rule on tin exports issued as exports drop
The Trade Ministry issued a new rule on tin exports on Friday, aiming to promote the downstream industry and better supervise the tin trade
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he Trade Ministry issued a new rule on tin exports on Friday, aiming to promote the downstream industry and better supervise the tin trade.
The rule places tin into four categories ' refined tin ingots, refined tin non-ingots, tin solders and non-solder tin alloys ' according to their purity level. Earlier, tin fell into two types ' refined tin ingots and other types of tin products.
The rule also requires exporters to get licenses as registered exporters of refined tin ingots or as registered exporters of industrial tin.
The ministry's director general for foreign trade, Partogi Pangaribuan, said the new regulation was expected to create legal certainty and a conducive business climate for business players, promote the domestic downstream industry and better supervise the tin trade.
Indonesia, the world's largest exporter, is set to see tin exports contract the most since January as at least 16 smelters have curbed production after a police campaign against illegal mining disrupted ore supplies.
Shipments also declined in July last year, slumping 42 percent from the previous month to 6,466 tons after the government increased the purity level for exports, according to ministry data. The predicted drop this month would be the largest since a 66 percent plunge in January, Bloomberg reported.
Exports in 2014 are also set to decline to the lowest in eight years following the enforcement of the rule, which sets standards for on minimum specification, the packaging of non-ingot products, shape and size, to prevent the false declaration of cargo.
Sales will probably tumble 35 percent to 8,000 metric tons this month from 12,377 tons in June as output declines about 40 percent, Agung Nugroho, corporate secretary at PT Timah, the country's biggest producer, told Bloomberg by phone on July 23. Exports could reach 10,000 tons, according to Jabin Sufianto, chairman of the Association of Indonesian Tin Exporters.
For the whole year, sales may drop 13 percent to 80,000 tons, said a Bloomberg survey on July 4.
Prices climbed 16 percent in the past year after Indonesia raised the minimum tin content for refined products and ordered ingots to be traded on a local exchange before shipment.
The lack of ore prompted some smelters to send workers home early, before Idul Fitri, Jabin said.
'I've just returned from Bangka and the smelters complained it was harder to get ore supplies,' Jabin told Bloomberg, referring to the main mining area of Bangka Belitung province. 'Some halted operations and gave workers a one-month Idul Fitri holiday. It's better to wait and see the condition in August,' he said on July 18.
Indonesia has 47 smelters, 21 of which are members of the Indonesia Commodity and Derivatives Exchange, the only bourse allowed to trade metals before exports.
Twenty of those members set up the exporter group in May to replace the Indonesia Tin Mining Association, said Jabin, co-owner of PT Eunindo Usaha Mandiri, a smelter in Riau Islands province.
National Police chief Gen. Sutarman ordered a clampdown on illegal mining in Bangka Belitung to prevent environmental damage, Antara news agency reported on May 23. Miners in the region held a protest rally against the raids, said Ali Hartono, field coordinator of the West Bangka tin miners, on June 9.
PT Justindo, a Bangka-based smelter, halted work last month as ore supplies dropped 80 percent after miners cut working hours on concerns about the raids, Azwari Helmi, a director, said in an interview with Bloomberg on July 18.
Linda Yulisman contributed to this story
