(Updates prices in seventh, final paragraphs.)
Oct. 11 (Bloomberg) -- PT Timah, Indonesia’s largest tin producer, will resume exports after prices rebounded, withdrawing from a nationwide halt to shipments agreed by producers last month to counter a rout. Tin slumped for the first day in seven, while Timah shares advanced.
“As soon as the ships arrive, we will export,” Wachid Usman, president director at Pangkalpinang, Bangka-based Timah, said in a telephone interview from Jakarta today. “We haven’t been exporting since the end of last month.”
Timah’s decision to reenter the global market, taken as the metal gained to $23,000 per metric ton, may depress prices. While some private smelters are waiting for $24,000 before they restart exports, there was a need for a government-imposed export quota in the future, according to Rudy Irawan, deputy chairman of the Indonesian Tin Industry Association.
“Every company has a different threshold, it depends on their production cost,” Irawan said by phone today. “For Timah, $23,000 is a good level, while for most of the small smelters it’s at $25,000 a ton.”
Tin in London lost 13 percent in August and 17 percent last month as commodities plunged on concern that the global economy was set to reenter recession. That slump prompted Indonesian producers including Timah to agree at a meeting on Sept. 26 to suspend exports from Oct. 1, targeting $25,000 per ton.
“In the future, we must continue to make such arrangements so there will not be an oversupply,” Timah’s Usman said. “If we don’t make an arrangement, the price will go down and the one who’s making profits are traders.”
Three-month tin dropped as much as 2.8 percent to $22,410 per ton on the London Metal Exchange, and traded at $22,600 at 5:18 p.m. in Singapore. The metal fell as low as $17,000 on Sept. 23, three days before the Indonesian producers agreed to the shipment halt.
Tin makers want the government to set up an export quota to help maintain prices, Irawan said. There are 21 companies producing and trading tin this year out of 32 registered exporters at the Trade Ministry, Johan Murod, a director at PT Bangka Belitung Timah Sejahtera, said on Sept. 29.
“We want to move forward and set up a quota for export, there’s no other way; we must limit shipments to control prices,” Irawan said. “We will soon meet again in Bangka to discuss this issue.”
Indonesia’s tin exports plunged 39 percent to 5,233 tons in September from August, Toto Rusbianto, head of mining exports at the trade ministry, said yesterday. Shipments in nine months to September gained 9.3 percent to 73,223 tons from a year earlier.
Timah shares rose as much as 3.6 percent to 1,710 rupiah, and ended at 1,660 rupiah in Jakarta. The stock has dropped 40 percent this year compared with the 4.6 percent decline in the benchmark Jakarta Composite Index.
--Editors: Jake Lloyd-Smith, Richard Dobson
To contact the reporters on this story: Yoga Rusmana in Jakarta at email@example.com; Eko Listiyorini in Jakarta at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at email@example.com