Posted on 29 Apr 2016
It said the shortage was mainly due to Chinese steel exporters cancelling their contracts with Malaysian importers, as domestic demand in China had shot up.
Another reason for reduced supply, it said, was that local mills had been shutting down lines and cutting jobs due to the unfair competition with Chinese steel imports sold below cost price.
“Some (Malaysian) steel users, instead of supporting and cooperating with the domestic steel mills on securing products that are available within the country, have been enjoying artificially cheap prices on products imported under unfair trade environment in the last several years.
“As such, what the industry players are facing now is just the result of how predatory priced imports can hurt the entire economic value chain, from losses and plant closures of steel mills to resulting temporary supply shortages during periods when imports are insufficient,” it said in a statement yesterday.
Due to the shortage, local mills were now reviving their machines and building their manpower again, it said.
Chinese steel prices shot up by over 50% in the past weeks, following a spike in domestic demand from its construction industry.
However, Misif said the domestic steel bar prices were still hovering at historical lows before China’s over-production in 2013.
“Hence, the artificially low Jan 2016 prices are, in no way, a fair benchmark to assess the magnitude of price increases,” it added.
In a separate statement, the Malaysia Steel Association said the local construction and property industries had enjoyed “sizeable profits” due to the cheap steel imports from China over the past few years.
In response to the recent outcry from construction players over the higher steel prices, the association said a typical two-storey affordable terrace house only used about three tonnes of steel bars.
“In the last three years, housing prices did not correlate with the sharp decline in steel bar prices,” it added.
Real Estate and Housing Developers’ Association of Malaysia (Rehda) had recently warned that if the prices of steel continued to rise, buyers of new property would have to pay more.
