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Friday, August 8, 2008

Steel bar supply in Malaysia adequate

There is no shortage in the supply of steel bars to the local construction industry, says Malaysian Iron and Steel Industry Federation (Misif).

The supply trend is consistent in the local market whereby installed capacity from all mills for steel bars is recorded at 3.5 million metric tonnes and capacity utilisation as at 2007 was only at 56 per cent for steel bar rolling, Misif said.

Although there have been allegations of shortages in the supply of steel bars, steel millers' requests for quantities of requirements for various projects have not been forthcoming and unless steel suppliers have forecasts of customer requirements, manufacturers are forced to make alternative business plans, it said.

"Then the issue arises that since shortages have not been proven, why the need for an export tax or ban?" it asked in a statement issued in Kuala Lumpur yesterday.

It said that as a manufacturing concern, and like any other industry, the steel industry cannot afford to just depend on domestic market and need to expand markets to include exports which will help the industry to be competitive through better utilisation of its capacities.

"Generally, steel prices are dictated by iron ore prices negotiated between the three major world ore suppliers with key users whereby in February 2008, top steelmakers in Asia had agreed to pay 65 per cent more for iron ore, setting a global benchmark for raw material prices.

In Malaysia, steel mills import more than three million tonnes of scrap annually and the prices of which have swung from US$350 (RM1148) per tonne in June 2007 to US$725 (RM2378) per tonne in June 2008.

By Bernama

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