A group of Indonesian tin smelters have put in place a three-month quota to cap exports at about 2,000 tonnes per month with the goal of supporting prices for the solder material, the chief of the industry body said on Tuesday. Indonesia is the world's top exporter of tin and the 19 members of the Indonesian Association of Tin Exporters (AETI), with an annual capacity of around 30,000 tonnes, met on Tuesday to discuss a possible export moratorium.
AETI could not agree on an outright export suspension, but members instead agreed to impose an export limit of no more than a combined 2,000 tonnes a month for around three months, AETI President Jabin Sufianto told Reuters by text message. "We will reduce export volumes to suit the current weak market demand," Sufianto said. "This may go on for the next three months and we will review the quota on a monthly basis."
When tin prices rise to around $19,500-$20,000 a tonne, AETI will also review the quota, he said. The quota, Sufianto added, will not be applicable to February because of members' contractual obligations and tin already exported through Indonesia's domestic bourse.
Tin prices have been caught in a global rout of commodities that has seen oil and copper prices tumble to multi-year lows, partly due to worries over ample supply and wobbly Chinese economic growth. Tin hit a low of $17,445 a tonne on the London Metal Exchange last week, a level not seen since August 2012. Indonesia's top tin miner PT Timah said at the weekend that it had suspended all new sales of the metal until the prices rise above at least $20,000 a tonne.
Last week, Sufianto said any action to curb exports would not work without the support of PT Timah, whose sales makes up just under 50 percent of the Indonesian market. State-owned PT Timah is not an AETI member, but Sufianto on Tuesday urged it to "be onboard for this limited export plan". Indonesia's refined tin exports were 75,925 tonnes last year and AETI sees this falling to between 65,000 and 70,000 tonnes in 2015. Shipments were 6,770 tonnes in January, down 34 percent from the previous month.
Indonesia has had limited success over the years with attempts to cut supplies and boost prices and many traders are sceptical about the chances of the latest scheme. Last year, a self-imposed export slowdown backed by the same tin association, new laws to close export loopholes through a domestic trading regulation and a police crackdown on illegal shipments all failed to bolster London tin prices.