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Monday, July 21, 2008

Govt asked to temporarily ban exports of steel

Many property developers and contractors have urged the Government to impose a temporary ban on the exports of steel and allow it to be imported to stabilise rising prices and meet growing local demand.

Although there is currently no serious shortage of steel in the country, industry players fear that this situation might not hold on for too long as there are currently many projects being undertaken by the public and private sectors.

They also claimed that some steel traders and suppliers were manipulating steel prices. “Those who can afford to pay can get their supply of steel but the smaller developers and contractors who cannot pay a higher price may not be able to carry on with their projects,” said a developer.

Master Builders Association of Malaysia (MBAM) president Ng Kee Leen said it was important that the Government allowed all steel bars that met the Malaysian standard MS146 or its equivalent the BS4449 standard to be imported tax free. As it is, he said not a single steel bar had been officially imported since the Government lifted the ceiling price of steel about two months ago.

This was because what happened on the ground was very different and there was still a lot of confusion as to the type of steel that could be imported. “The Government must fully liberalise and clarify the process and procedure in the importation of steel,” Ng said, adding that international steel traders have lost confidence in Malaysia as they found the process and procedure of importing steel vexing.

He said if the Government did not take action now, more than 140 related industries including the tin mining, timber, electrical, air-conditioning and joinery industries might collapse.

The country consumes some two million tonnes of steel per year or about 150,000 tonnes a month. Steel prices have soared from about RM3,000 per tonne two to three months ago to RM4,200 per tonne depending on the term of payment.

“The rising price of steel is like a roller coaster except that it does not come down. The situation is very critical,” said Ng.

MBAM past president Patrick Wong said MBAM had earlier called on the Government to stockpile steel and stabilise raw material prices to help government and low-cost housing projects.

He also urged the Government to monitor the situation.

International Real Estate Federation (FIABCI) Malaysia Chapter president Datuk Richard Fong said many developers were facing a “double squeeze” from increased construction cost and falling sales.

Many contractors have refused to tender for new jobs although some developers have agreed to absorb any rise in cost of steel and cement. This is because they feel that other raw materials such as tiles, copper, wires and even rocks have also increased in prices.

By The Star (by S.C.Cheah)

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