Tin trade via ICDX drops sharply

Tin bar transaction volume on the Indonesia Commodity and Derivatives Exchange (ICDX) dropped by 54 percent to 3,795 metric tons in January of this year from 8,245 tons in the previous month, Investor Daily reported Monday.

Tin bar export via the ICDX also dropped sharply by about 76 percent during the month to 2,610 tons from 10,865 tons in December.

ICDX President Commissioner Fenny Wijaya lamented the sharp drop in the transaction and export volume, saying that the bourse initially thought it was caused by difficulties in getting tin raw material, but found out later on that there were three primary reasons for the drop.

He said that exporters deliberately avoided transaction and export of tin bars via the bourse because of the requirement to pay 3% royalty, to avoid tax and commit transfer pricing, and in some cases the tin came from illegal miners. ?We have reported this to the government. We?re waiting for government policy to deal with the problems,? he said.

The ICDX started tin bar trade on August 30 following the issuance Ministry of Trade regulation, requiring trade and export of tin bars to be conducted via the bourse. However, the regulation allows other form of tin such as solder to be traded outside the ICDX until 2015.

Fenny said that miners take advantage of this legal loophole, exporting tin in the form of solder to Malaysia and turns them into bar in the neighboring nation. He pointed out that while Malaysia?s capacity is only 3,000 tons of tin bars per year, its export reaches 42,000 tons per year. ?Where does the tin come from if not from Indonesia as the world?s largest producer?? (*)