Some Resumption of Tin Refineries, but Limited Supply from Indonesia

Indonesian government apparently allowed some idling tin refineries restart operations after the idling operation order. Six to eight refineries are said to get approval for resumption. However, the market expects the government introduces stricter control for crude tin ingot export. The unstable supply issue from Indonesia continues for a while when Southeast Asian refineries, which depend the crude tin supply on Indonesia, are likely to keep lower operation rate due to limited availability of raw materials. Indonesian government ordered illegal refineries to stop operations, which represent annual 60,000 tonnes of outage, in early October to secure strategic resources though the government gave silent approval for the illegal operations before. Some of the idling refineries got approval to resume operations in early January. However, Japanese trading firm source said the firm has no further information including condition for resumption. The refineries might have to pay royalty and to improve environmental action. With the higher cost, they could lose cost competitiveness to major refineries. Indonesian government could ban crude tin export as officials said late 2006. If the idled refineries resume operations, they couldn’t export the products as before. Refineries in Thailand, Malaysia, Singapore and China could continue the slower operations due to limited availability of crude tin. The limited supply from the largest tin producing country of Indonesia lifted the market price to record level of more than US$ 10,000 per tonne. The higher price level is likely to continue under limited supply.