The Indonesian government plans to introduce a tin pricing regulation to protect domestic mining operations amid market volatility.

In January 2026, tin prices reached an all-time high on global metal exchanges. Although the tin market is experiencing a deficit due to tight supply fundamentals, Project Blue understands that current market conditions have been aggravated by speculative market activity, bullish market sentiment, and a weakening US dollar. On the London Metal Exchange (LME), three-month futures prices peaked at US$56,816/t on 23 January, whereas prices on the Shanghai Futures Exchange (ShFE) reached a peak of US$57,309/t on 27 January.

Following the price rally, Indonesia’s Minister of Energy and Mineral Resources, Bahlil Lahadalia, announced plans to introduce a minimum reference price for tin, aimed at regulating the market and protecting its domestic primary producers from volatile global price fluctuations.

According to Project Blue, Indonesia’s refined tin production rose by 7% y-o-y in 2025, accounting for approximately 14% of global refined tin supply, after domestic refined production fell to its lowest level in more than two decades in 2024. Both refined tin and tin concentrate production are highly concentrated within the Bangka Belitung Islands Province and the Riau Islands, with state-owned PT Timah accounting for around 38% of national refined and unrefined tin output, whilst private producers supply the balance.

This supply mix is expected to shift in 2026 as PT Timah begins operating several confiscated smelters. These smelters were formally handed over to the state-owned producer last year following an investigation into corruption in the domestic tin trade, which was followed by a large-scale crackdown on illegal mining and trade routes in the Bangka Belitung Islands Province. Notably, small-scale domestic tin miners voiced concerns over the reform of the industry, fearing that it would be more challenging to sell raw materials to smelters. In response, PT Timah raised its ore purchasing price and announced that it would pay miners directly, eliminating intermediaries.

Indonesia regained its position as the world’s largest exporter of unwrought tin in 2025, shipping 47.5kt (gross) between January and November, representing approximately 23% of global exports. Peru ranked second, shipping 26.3kt (gross), accounting for a global share of 12.7%, over the same period. This trade trend underscores the significant reliance of Indonesia’s tin industry on trade and highlights the industry’s exposure to price volatility.

The recent price rally, driven more by sentiment than fundamentals, does not bode well for the market. Downstream orders are understood to have slowed due to high raw material prices, with further downside risk expected ahead of the Chinese New Year, when demand typically enters a seasonal lull. As such, when market sentiment fades, prices could potentially face a downward spiral. Tin prices have already declined after the ShFE announced that three groups of clients suspected of not properly disclosing their ultimate ownership would be subject to one-month limits on opening new positions and restrictions on withdrawing funds from tin and silver markets.

Indonesia’s proposed minimum benchmark price could help stabilise the market and shield domestic producers during periods of heightened volatility. Although details of the policy remain unclear, the benchmark is expected to act as a floor price linked to minimum production costs, providing miners protection during price downturns. Beyond producer support, the policy is intended to encourage investment in domestic smelting and refining, particularly in the Bangka Belitung Islands Province, as a regulated price could help sustain domestic feedstock availability. This, in turn, would incentivise local tin processing and support the regional economy.