Monday 22 Apr 2024
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KUALA LUMPUR (Feb 15): Amid rising prices of building materials such as iron and steel, domestic steel bar manufacturers have no control over the rising steel prices that result in higher building material costs, said the Malaysian Iron and Steel Industry Federation (MISIF) and the Malaysia Steel Association (MSA) in a joint statement.

The two trade bodies noted that the domestic steel prices are subject to global supply and demand dynamics.

Both associations highlighted that steel bar users such as contractors and housing developers have been able to import steel bars at zero import duties without the need for an approved permit since 2008.

"Steel bar prices rose in the first half of 2021, owing primarily to strong demand resulting from global economic recovery and hike in raw material prices, particularly scrap, iron ore and coking coal, due to supply tightness and global supply chain disruptions.

"Coupled with the Chinese government's tight control over steel production and the removal of export rebates, the increasing raw material costs are reflected in rising steel prices.

"In addition, rising energy prices, such as a 64% increase in natural gas tariff in 2021 in Malaysia, as well as a surge in international freight costs also contributed to the increase in imported material costs and steel prices," they said.

The associations added that domestic steel bar prices have constantly been below China prices. They reiterated that the trajectory of domestic steel prices tracks the international price trend, particularly China steel prices, as the country accounts for more than half of global crude steel production.

MISIF and MSA also pointed out that they are not aware of any cartel dominance in the iron and steel industry.

According to both associations, steel products account for approximately 3% of total housing project costs.

"We welcome engagements with relevant ministries and associations for further deliberation."


Edited ByKathy Fong
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