The Kuala Lumpur Tin Market (KLTM) tin trading was suspended with effect from 9 June until further notice. There are no transactions occurring as a result of a decision by Malaysia Smelting Corporation (MSC) to invoke force majeure on 7 June.
A Malaysian COVID Movement Control Order (MCO) effective 1 June restricted manufacturing and manufacturing related services allowed to operate during the lockdown. Only top listed categories are allowed to operate at 60% workforce capacity, with a second set to ‘warm idle’ at 10% capacity.
Under this regime MSC will be able to have 10% of its employees return to the smelter from 9 June. The company has confirmed to ITA that it continues urgent appeals to the Malaysian Ministry of International Trade and Industry (MITI) for recognition as an essential business.
MSC said it had “no choice” except to declare force majeure after having already ceased smelting operations from 3 June.
The initial MCO applies until 14 June and may be extended depending on progress in containing the latest COVID wave. Cases have already fallen sharply from a peak of 7,105 on 1 June to 5,566 on 8 June.
Our view: MSC had already been under pressure after announcing production issues in April. This latest disruption is, for now, relatively short-term but critically depends on the next phase of government action.