New regulation may result in lower tin exports

The trade minister?s new regulation which prohibits exports of tin ingots with purity level lower than 99.9 percent beginning July next year will discourage exports of the metal, the association of tin producers (ATTI) said.

The association?s chairman Hidayat Arsani predicted that the tin exports would decline by at least 60 percent from about 60,000 tons this year due to the new regulation. ?Besides due to the new regulation, producers would also reduce their export volume due to the decline in prices,? he said.

Under the new regulation, beginning in July next year, the purity level of tin ingots which could be exported is raised to 99.9 percent from 99.85 percent at present. In the new regulation, the trade ministry also allows only exports of tin solder with tin content of at least 63 percent and lead content of 25 percent.

Although the new policy would mean having to invest more to upgrade their refining facility in order to meet the requirement, the association supports it, saying that the decline in the shipment will result in the increase in prices.

?There is no problem with the decline in the tin exports, as long as producers can receive more earnings due to the price increase,? Hidayat added.

Meanwhile the corporate secretary of the country?s largest tin producer PT Timah, Agung Nugroho seemed to agree, saying that the new regulation would result in an increase in the price of tin ingots shipped from Indonesia. ?The higher the purity level of the tin ingots, the higher the price,? he said, adding that the price of tin ingots with purity level of 99.9 percent could reach US$20,000 per ton. According to him, tin ingots with purity level of 99.9 percent will have added value of at least $200 per ton from those with purity level of 99.85 percent.

Agung said that PT Timah would not be affected by the decision because the company has since June 2011 been able to produce tin ingots with purity level or 99.9 percent, 99.92 percent and 99.99 percent.

According to him, about 65 percents of PT Timah?s tin production of 38,000 tons a year, comprise of tin ingots with purity level of 99.9 percent, while the other 35 percents comprise of those with purity level of 99.92 percent and 99.99 percent. (*)