MSC confirms suspension of tin smelting operations in Malaysia until June 28

Tin smelting operations at the Malaysian Smelting Co (MSC) will be suspended until June 28, the company confirmed this week, after the country's Covid-19 lockdown was extended again.

Malaysian Prime Minister Muhyiddin Yassin announced the original lockdown on May 28, after the country reported 8,290 new Covid-19 cases, according to Johns Hopkins University data. And under the government’s Third Movement Control Order, MSC was ordered to suspend operations until at least June 14 under a reclassification of economic activities in the country.

MSC then declared force majeure on its smelting activities on June 7 after the government rejected the tin producer’s appeal to be classified as an essential service, which would have allowed it to continue to operate during the lockdown. 

A further appeal by MSC was not approved by June 14, which led to the tin smelter suspending its operations for a further two weeks, “subject to the success of our appeal, if any,” the company told customers on June 14. 

“It is not known if further phases of the lockdown will be implemented or whether other measures may be undertaken by the government [that] may cause further disruption to our operations,” MSC added. 

Being granted essential company status would allow MSC to have up to 60% of its workforce in attendance at its smelters.

The Malaysian government said it had to extend the lockdown until June 28 because the country’s daily Covid-19 case numbers still exceeded 5,000 as of June 14 and on Tuesday, some 5,419 cases were reported, according to the latest John Hopkins University data. 

Tin ore already at MSC’s sites has been secured in its warehouses, the company said.

“As a leading global tin producer, we will continue to closely monitor the evolving situation while engaging with the relevant Malaysian government agencies to work toward a positive outcome,” the company said. 

Based on the company’s 60,000-tonne-per-year production capacity, some 4,600 tonnes of metal would be lost over the four-week suspension. 

“The market has lost an absolute fortune [in terms] of production,” a tin trader told Fastmarkets.

Tin’s three-month price on the London Metal Exchange reached a new year-to-date high on Monday, June 14 of $31,850 per tonne and was last seen at $31,350 per tonne.

Fastmarkets’ tin grade A min 99.85% ingot premium, ddp Midwest US, was assessed at a new all-time high of $3,000-3,600 per tonne on June 15, with US customers said to be most affected by the MSC suspension. 

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