London 23/03/2016 - Stocks held by Refined Bangka Tin (RBT), Indonesia's second-largest tin smelter, have been assigned to its long-term customers after the company announced last month that it would close, sources told FastMarkets.
RBT, which had refining capacity of around 12,000 tonnes per year, according to its official export plan for 2016, will be shuttered and its mining concessions turned into an environmental conservation area.
But the large overhang of tin stocks held by RBT in Indonesia and Singapore have been allotted to the merchant customers with whom the company had long-term supply contracts, sources told FastMarkets.
RBT has delivered as many months of commitments as possible in advance to its customers and from there will cease to be a tin producer.
"Whatever tonnages they had they were pre-assigned and have been delivered. Traders are now sitting on them and they will do for the next two or three months," a tin trader said.
As well, the London Metal Exchange announced today that it would delist RBT's 99.9 percent purity 'RBT' brand tin ingots as a brand of good delivery.
"No further deliveries of tin brand RBT will be accepted for LME warranting with effect from 16 June 2016," the LME said in a release on Wednesday.
The loss of RBT from the market lowers the number of LME tin brands to just 18 and will also limit exports from Indonesia over the next year.
With the introduction of new export rules in Indonesia, other smelter will not be able to snap up RBT's mining concessions to fill the vacuum of lost production - smelters there have already submitted their auditable production and export plans to the government.
"We don't see anyone else stepping up because everyone is now limited to their quotas so it's not like anyone can take it over," a second trader said.
Premiums for physical 99.9 tin ingots in Singapore firmed by $10 to $90-120 per tonne for metal in Singaporean warehouses this week. While market supply is beginning to tighten due to cuts worldwide, demand for the metal used for solder in circuit boards and in a variety of chemical processes remains sluggish.
(Editing by Mark Shaw)