Tin Gains Seen by Indonesia as Largest Shipper Takes Aim at LME

Indonesia is seeking higher tin prices as the largest exporter presses on with a policy that metal be traded on a local exchange before shipment, affirming a shift that roiled the market when it began three months ago.

The policy, which started on Aug. 30, is on the right track, according to Sutriono Edi, head of the Commodity Futures Trading Regulatory Agency. The government doesn’t envisage changing the rule as volumes on the Indonesian Commodity and Derivatives Exchange, or ICDX, are rising, said Trade Minister Gita Wirjawan, who’s targeting higher prices.

Southeast Asia’s largest economy wants to challenge the London Metal Exchange as the site for setting the benchmark rate for the metal used in smartphones and packaging, as well as boost prices. The curb reduced supplies to the global market, exacerbating a deficit, and pushed futures to a six-month high. This year’s best performing base metal was listed by Morgan Stanley’s Peter Richardson this month as a top pick for 2014.

“I’m pleased but not fully satisfied yet, if possible the price should increase further,” Wirjawan said on Nov. 25 in Jakarta, without giving a specific target. “That’s the value crystallization that we want,” he said.

Tin rose on the LME in July and August, before the rule took effect, and then jumped 9.8 percent in October, the biggest monthly advance since September 2012. The price, which reached $24,000 a metric ton on Oct. 4, traded at $22,915 at 1:34 p.m. in Jakarta yesterday. Stockpiles tracked by LME fell to 10,795 tons yesterday, the smallest since March 2012 and 30 percent below the level on Aug. 30.

(Source: Bloomberg)