JAKARTA: The Bangka-Belitung Tin Exchange is expected to be established by December 31, 2011 in order to provide certainty on the tin price increase in global market.
The establishment of the tin exchange is expected to overcome the ineffective moratorium on tin export which aimed to improve the selling price of the commodity to US$25,000 per ton.
Director of PT Bangka Belitung Timah Sejahtera, Johan Murod, expects the tin exchange in Bangka Belitung (Babel) can be established before the moratorium expires by the end of this year.
"We expect the exchange establishment committe headed by Wachid Usman [President Director of PT Timah Tbk] can quickly realize the plan before the moratorium ends," he said in Jakarta last weekend.
The tin producers agreed to launch the moratorium from October 1 to December 31 2011, but gave no significant effect yet on tin price. Even BNP Paribas SA cut its forecast on the commodity price for 2012.
Executive Director of Indonesia Timah Association Rudi Irawan said tin users are still waiting for stakeholders’ decision in Indonesia related to the ability to form Bangka Belitung Tin Exchange.
"This moratorium is not yet effective to raise the tin price. However, this is just temporary as end-users are waiting for the stakeholders to establish Bangka Belitung Tin Exchange," he said.
The tin users, he added, seem like doubting the ability of Indonesian peoplee to establish its own tin market.
Such pshycological situation blocked the tin price from increasing, although the tin stock listed on LME is only enough for few days.
"However, if Indonesia is successful to establish the tin exchange, all the end-users' doubts will be erased. It will also force foreigner speculators to stop manipulating the tin price," he said.
Meanwhile, London Metal Exchange (LME) recorded tin was traded at around US$21,000 per ton last week, or relatively flat from the price before the moratorium announcement.
Tin stock on November 17, as quoted by Bloomberg, fell 1.2% to 14,145 tons which is the lowest level since November 18, 2010. However, the decline in tin stocks was not enough to raise the price of tin.
Thus, Indonesian's expectation of tin price at US$25,000 per ton curbed. PT Timah, their biggest tin exporter even predicts the price is only US$23,000 per ton amid the United States and Europe crisis.
"If the price is still below US$25,000 per ton when the moratorium ends, there will be a discussion whether to continue the moratorium or not," said Johan.
He revealed Bangka Belitung Timah Sejahtera since 2 weeks ago has stopped production due to the implementation of a moratorium on the tin export.
Thus, its 2011 revenue may fall 58% to US$21 million, compared to the 2010 figures at US$50 million. (t03/ags)