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Tin Price Dimmed As Covid-19 Restrictions And The Strengthening of The Dollar
Tin Price Dimmed As Covid-19 Restrictions And The Strengthening of The Dollar
Wednesday, 26 October 2022

Price Performance Indicators

Product 

Price

% change

ICDX

$22050

-7,93%

LME

18.435

-6,42%

KLTM

NA

-

SHFE

CNY167060

-3,99%

USD/IDR

15610

0,84%

In a week (17/10 – 21/10) ICDX tin price weakened by 7.93%.

China's Covid-19 restrictions and Indonesia's policy regarding the ban on tin exports.

Market Review

ICDX tin price weakened towards the close of October and was observed to move around $22,000 per ton in line with the strengthening of the US dollar causing tin prices to fall sharply. The strengthening of the US dollar makes dollar-priced tin seem expensive for holders of other currencies. The strengthening of the US dollar due to inflation is still considered at high levels and a number of hawkish comments by Federal Reserve Governor Michelle Bowman who said "if high inflation does not start to subside she will continue to support aggressive rate hikes aimed at taming price pressures."

Reports of uncertainty about China's demand for tin after the policy to tighten activities in the community faced Covid-19 which dominated the overall mood in the tin industry market. Chinese President Xi Jinping reiterated his country's stance on Covid-19 in contrast to market expectations for an easing of restrictions. The Covid-19 restrictions in China had an impact on the tin supply chain so that tin supplies piled up in warehouses due to weak demand. The strengthening of the US dollar and the Covid-19 policy became a negative catalyst for the movement of tin prices.

Market View

Investment Minister or Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia stated that in 2023 the Indonesian government plans to ban exports to foreign countries. This is done to develop domestic tin downstream. The ban on tin exports will target ingots, which are tin derivative products. This applies so that tin downstream activities can run for the greater benefit of the state. This export ban plan can also open up wider job opportunities if domestic downstreaming continues to grow. But on the other hand, with the condition of infrastructure in Indonesia that is not yet capable of absorbing production capacity, the Indonesian government must be committed to improving supporting infrastructure to help absorb domestic production, considering that currently the absorption rate of domestic production is only about 5% of the total production in Indonesia. . As a result, Indonesia cannot play a role as a determinant of world tin prices.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Date

Data/Events

Actual

Expectation

Previous

24-October

CNY - GDP Growth Rate YoY

3.9%

3.4%

0.4%

24-October

CNY - Fixed Asset Investment (YTD) YoY

5.9%

6%

5.8%

24-October

CNY - Industrial Production YoY

6.3%

4.5%

4.2%

24-October

CNY - House Price Index YoY (SEP)

-1.5%

-

-1.3%

24-October

CNY - Balance of Trade

$84.74B

$81B

$79.39B

Sumber: ICDX Research

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