Indonesia's tin exports jumped sharply in May

Data released by Indonesia's Ministry of Commerce shows that the country's tin exports rose substantially this May. Exports for the month were 6,263 tons, up 23 percent from 5,071 tons of tin exported in April. Published figures are based on figures provided by companies during pre-shipment inspections.

Tin sales in Indonesia continue to rise, well above the 4000 ton export limit set by Bangka-Belitung Governor Rustam Effendi. The latest data show that sales during the first half of June this year have already exceeded 4,760 tons. Export shipments have soared to 1,600 tons over the past two days. According to industry experts, the sudden surge in tin exports came amid fears that the administration could impose additional export quota restrictions. It is also expected that stricter controls in the industry will be announced soon.

Tin factories are forced to defend their sales volumes in order to raise cash for bonus payments to workers for Ramadan. In addition, the mills must settle all of their dividend payments, as mining is set to reach a new status starting in August this year. The new rules could lead to the closure of factories that do not comply with the rules. This is expected to reduce production levels, which in turn could lead to a reduction in tin exports.

Meanwhile, tin prices, which fell by almost 15 percent in 2014, have now dropped by almost 24 percent since 2015. Indonesia is a key tin producer and has been implementing various restrictions on the supply of tin from the country over the past years in an attempt to alleviate market congestion. Therefore, further export restrictions are likely inevitable. As such, tin prices in China's domestic market are expected to benefit from a lack of supply.