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Saturday, January 19, 2008

EPU to call for special meeting with steel millers

PETALING JAYA: The Economic Planning Unit (EPU) is believed to have called for a special committee meeting with steel millers and its end users next Tuesday to discuss potential liberalisation of the domestic steel market.

A source told StarBiz the meeting, the first between industry players and the EPU, reflected the Government's seriousness in resolving pressing problems pertaining to escalating production and operational costs among steel millers.

It would also address the issue of supply shortages and high steel prices affecting construction companies and builders.

Patrick Wong

He said: “Issues for serious consideration and implementation include the total abolishment of price control on billets and steel bars, the automatic pricing mechanism (APM) for steel, and removing import and export restrictions on steel bars and billets.”

Early last month, the Government raised the ceiling price of steel bars and billets, which are price-controlled items, by 12%. This caused an uproar among the construction and building fraternity while steel millers said the price hike was inevitable, given their extremely high costs.

Master Builders Association Malaysia president Patrick Wong said: “Further liberalisation in the domestic steel price is good for the builders, given the current steel supply shortage in Malaysia.

“We want the Government to remove protectionism in the steel industry by opening the market and allowing market forces to decide on steel prices instead of considering an APM,” Wong said.

Real Estate and Housing Developers Association Malaysia president Ng Seing Liong concurred that the Government must allow contractors and builders to import steel from Thailand, China and the Philippines, which were 10% to 15% cheaper than domestic steel.

He claimed that despite the recent 12% hike in the price-controlled items, builders and contractors still needed to pay RM250 to RM300 above the new control price for steel bars at RM2,400 to RM2,500 per tonne, given the shortage.

Ann Joo Resources Bhd managing director Datuk Lim Hong Thye said steel millers were looking at APM as an effective measure to ensure fair steel prices, which closely track international prices. He said there was an immediate need to further liberalise the local steel sector, especially with the rolling out of big projects under the Ninth Malaysia Plan.

By The Star - StarBiz (by Hanim Adnan)

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