The price of ICDX tin at the end of July moved up from last week to the level of $25,100.00 per tonne, the improved performance of Tin was due to tight supply affected by production that has not yet recovered due to the condition of China as the world's largest Tin producer and consumer, which is still dynamic with COVID- 19.
On the other hand, the US central bank, the Federal Reserve/The Fed decided to raise the benchmark interest rate by 75 bps to 2.25% to 2.5% on 26 July. Markets predict the Fed's rate hike will touch 100bps this July, seeing the high inflation rate touching 9.1% and the highest in 40 years. The Fed Governor Powell's statement regarding the negative impact of too high interest rate hikes on the US economy also contributed to the positive movement of tin prices. The statement is an indication that the Fed is likely to put the brakes on its aggressive policy. The increase in Tin prices was also influenced by the weakening performance of the US Dollar Index as it became cheaper for holders of other currencies.
The Impact of the Ban on Tin Exports on the Indonesian Economy
This year (2022) Indonesia's tin exports have increased compared to last year. Indonesia wants economic transformation and structural reforms. With the prohibition of exporting raw materials starting from bauxite, nickel, copper and tin. By expecting added value from these raw materials, this will have a direct impact on the Indonesian economy, so that this policy can improve and improve Indonesia's trade balance and balance of payments. But on the other hand, with the condition of infrastructure in Indonesia not yet capable of absorbing production capacity, the Indonesian government must be committed to improving supporting infrastructure in helping to absorb domestic production, considering that currently the absorption rate of domestic production is only about 5% of the total production in Indonesia.
Weekly Economic data & Event
JPY - Monetary Policy Meeting Minutes
USD - FOMC Statement
USD - Federal Fund Rate
USD - FOMC Press Conference
JPY - Tokyo Core CPI y/y
CNY - Foreign Direct Investment ydt/y
Source : ICDX Research