Posted on 28 Sep 2016
Master Builders Association Malaysia (MBAM) is “strongly” against the safeguard measures for steel coils and rebars to prevent a repeat of the 2008 artificial rebar shortage or manipulation from happening again.
“MBAM fears that they will lead to uncontrollable prices of steel bars due to the absence of the free flow of imported steel. A few months earlier, the price of steel bars had increased from RM1,500 per tonne in January 2016 to a record high of RM2,700,” the association’s president Foo Chek Lee said in a statement.
Last week, the Government introduced safeguard duties of 13.9% for steel coils and 13.4% for steel rebars, following the plight of many domestic steel manufacturers, who have been experiencing margin compression or losses, especially due to dumping activities by the mainland Chinese players. This safeguard rate will be imposed on top of the existing 5% import duty.
“The Government should look at a sustainable long-term plan on this issue, as the local producers are not supposed to be protected for their inability to be competitive even when the Government has provided the industry with numerous protection measures,” Foo said in the statement.
“Besides that, this is a U-turn from the Government’s previous decision in 2008 to liberalise the steel industry by abolishing the price control or ceiling price”, he said.
“MBAM is not against profit-making by the steel millers. However, MBAM hopes that they will not partake in excessive profiteering by taking advantage of the other industries,” Foo said.
Given that various public-interest construction projects are still ongoing or being planned, Foo said it was certainly against public interest to impose any safeguard measures on fairly priced rebar imports and increase the cost of construction projects.
“It is simply not logical to burden and pass the cost to the consumer in order to protect a few companies.
“We urge the Government to do a proper study on the potential impact of safeguard measures on imported steel products on the construction industry and other industries, which will directly or indirectly impact the public,” Foo said.
