[SMM Analysis] Review and Outlook of Indonesia's Tin Ingot Export Market: A Mix of Challenges and Resilience

SMM September 20: As global manufacturing gradually recovers, the core application areas of tin ingots, such as electronics and the automotive industry, show strong demand, indicating that tin ingot consumption is likely to further increase. However, potential risks to the global economy, such as inflation, trade protectionism, and geopolitical tensions, may adversely affect the tin market, exacerbating tin ingot price volatility and impacting exporters' decisions and the supply-demand balance in the market.

Indonesia, as an important exporter of tin ingots, holds a significant position in the global market. A deep analysis of Indonesia's tin industry reveals that it faced multiple challenges at the beginning of 2024. This year, Indonesian producers faced the requirement to apply for a three-year license for the first time, compared to the previous one-year validity, and undergo strict regulatory reviews annually, undoubtedly increasing industry uncertainty. Meanwhile, the new president, Prabowo Subianto, promised to continue and strengthen his predecessor's commodity policies, indicating stricter government regulation of the tin industry. As a result, the presidential election in February caused delays in license issuance, and the government's ongoing investigation into historical corruption in the tin trade further prolonged these delays.

Through SMM's in-depth analysis of Indonesia's export data from January 2023 to July 2024, it is evident that PT Timah consistently ranked first in tin ingot exports, maintaining a stable 24% market share, highlighting its significant position in Indonesia's and the global tin ingot supply chain. In terms of ports, Batu Ampar Port, with a high shipment share of nearly 95%, has become a crucial hub for global tin ingot trade. Additionally, China and India, as Indonesia's main export destinations, accounted for 38% and 18% of exports, respectively, reflecting the strong demand for tin ingots in these two countries and their close economic and trade ties with Indonesia. Regarding shipment trends, the surge in exports at the end of 2023 was mainly due to unconsumed quotas, while the beginning of this year saw a decline in export volume due to domestic political factors. However, with the gradual adjustment of policies and optimization of approval processes, future quarterly shipments are expected to stabilize and rebound.

Finally, in the comparative analysis of domestic and overseas market price differences, considering the shipping schedule factors, we compared the one-month delayed domestic and overseas market price differences with the volume of tin ingots exported to China. The results showed a high degree of synchronization between the two trends.

In summary, despite the multiple factors affecting the global economy and domestic policy adjustments, Indonesia's tin industry still demonstrates strong resilience and market potential. Looking ahead, with the gradual clarification of policies and market self-adjustment, Indonesia's tin ingot exports are expected to show a more stable development trend.