Indonesian tin exports have plummeted due to the Indonesian government’s efforts to try to control the tin trade through new regulation. As a consequence, the electronics industry is starting to worry for its supply.
Tin is mainly used for soldering mobile phones and computers electronic circuits, but it’s becoming a rare commodity. Indonesia, the first tin exporter, representing a quarter of the world production, has strictly limited its exports to try, once again, to raise the metal price.
It has first only allowed high purity tin to leave the country. Then, since the end of August, the government has been forcing buyers to go through a new Indonesian Stock Exchange, to circumvent the metals market in London, which it accused of speculation.
But most buyers shunned the new exchange because it does not offer futures contracts. In the absence of customer legally registered in Indonesia, the local tin heavyweight, PT Timah, had to declare force majeure and stop selling.
Last month, Indonesian tin exports were virtually reduced to nothing. The price of tin rose by 10% in a month and a half on the London Stock Exchange. For now, the electronics industry has not reached a panic state. Buyers had stockpiled tin in anticipation of the new Indonesian regulation and they expects that Indonesia will not forever turn its back to tin income.
However, if nothing moves within two months, the situation could really become very tense on the tin market where Indonesia has become an even bigger player since its main competitor, the Democratic Repubic of Congo, cannot trade with US companies because of Dodd-Frank.