The Indonesia Commodity and Derivatives Exchange (ICDX) officially relaunched its first physical tin contract on Friday with the bold target of setting the reference price for tin as an alternative to the London Metal Exchange.

Under the new market name '€” the Indonesia Tin Exchange '€” the price of tin (TINPB200) traded at US$21,510 per metric ton during the session, which lasted just seven minutes.

The Indonesia Tin Exchange has now effectively replaced the previous Indonesia Tin Market (Inatin), which failed to attract buyers last year.

The ICDX will open trading for tin contracts under five categories '€” TINPB300, TINPB200, TINPB100, TINPB50 and TIN4NINE '€” in five trading sessions from 2:30 p.m. to 3.20 p.m., with each session ending in seven minutes plus a three-minute break.

Each lot totals 5 metric tons of tin with a purity level of 99.9 percent.

Shipments will be carried out from four delivery points: Muntok, Pangkal Balam, Belitung and Kundur in Bangka Belitung province '€” Indonesia'€™s biggest producer of the commodity.

ICDX president director Megain Widjaja said after the launch that transactions at the exchange were expected to generate higher prices than the London market, which currently sets the international tin benchmark price, due to the purity level of tin sold.

The tin traded at the London market has a purity level of 99.85 percent, while the purity level at the ICDX stands at 99.9 percent to comply with a new trade rule requiring registered exporters to sell their tin metal through local commodity exchanges starting from the end of this month.

Megain said he was upbeat sizeable tin transactions would occur at the exchange as the mandatory rule provided a push for exporters to trade their products through the exchange, thereby effectively helping shape prices.

'€œI believe many more tin suppliers will join us. They will now just wait and see as the common norm applies,'€ he said.

At present, 12 firms '€” including PT Timah Tbk., PT Tambang Timah, PT Refined Bangka Tin and Korea'€™s Daewoo International Corporation '€” have committed to carry out transactions at the Indonesia Tin Exchange.

The 12 firms account for about 30 percent of Indonesia'€™s overall tin exports.

Earlier, the ICDX also sold physical tin contracts through Inatin, which debuted on Feb. 1 last year.

However, only a few months after its establishment, the tin market failed to draw sufficient transactions as tin exporters failed to honor their commitments although prices increased to a record $25,550 per ton, which was higher than the London market.

After trading a total of 116 lots last year, business at the ICDX'€™s Inatin collapsed, with no transactions this year.

In contrast, the London market'€™s tin contract, which dated back to 1877, has traded more than 60,000 lots by mid-July, according to data compiled by Reuters.

Trade Minister Gita Wirjawan, who witnessed the session, said that the move was the first step for Indonesia '€” the world'€™s largest tin producer and exporter '€” to become a price maker.

'€œOur future interest will be to achieve a big scale transactions at the exchange. This will allow us to boost our capacity to set higher prices for our commodities, including tin,'€ he said.

Last year, Indonesia'€™s tin exports totaled 100,976 ton, with the lion share going to Singapore (68 percent), followed by Malaysia (13 percent) and China (5 percent).

Popular

Potential GoTo-Grab merger stirs concern over govt overreach

School collapses raise concerns over misplaced priorities in education budget

EU bows to pressure on loosening AI, privacy rules