The Butterworth smelter has five reverberatory furnaces, with annual capacity of some 25,000 tonnes. FastMarkets has reported that two of the furnaces at the Penang-based smelter have failed. A further furnace is currently undergoing re-bricking. The company claims that the downtime is due to “natural wear and tear” of the aging furnaces, and that they will be operational again in a few days.
The Penang-based Butterworth smelter has been in operation since 1902. However, MSC has been working to replace the facility with a more modern smelter since 2016. The company plans to move to Pulau Indah, Port Klang later this year. There has reportedly been little investment into Butterworth due to the impending move.
In communication with ITA, MSC chief executive officer Dato’ Dr Patrick Yong explained that the different furnaces will come back online over the next month. “One of them will be up and running today and another in one week” he said. “The third is expected to be on line in a month or so.”
“We are ramping up tin production at our new Pulau Indah smelting plant using the more efficient Top Submerged Lance furnace as we continue to deliver shipments,” Dr Yong said in a statement to FastMarkets. According to sources at MSC, the company completed commissioning of the new smelter in November 2020. However, the new plant is not yet running at full capacity. The company is still waiting for a crucial component which has been delayed by COVID. Once installed, the switch to the Port Klang facility will be imminent.
Our view: In 2020, MSC produced some 22,400 tonnes of refined tin. The furnace issues at Butterworth are expected to delay some 500 tonnes of refined tin production. However, Dr Yong expects the combination of the Butterworth and Port Klang smelters to be more than sufficient to recoup the lost production. “Together with the five furnaces at [Butterworth], we should be catching up with the hiccups caused by the Covid and breakdowns. We are grateful to have very understanding customers who have been bearing up with the situation.”