Steel industry bodies explain supply squeeze
PETALING JAYA: The Malaysian Iron and Steel Industry Federation (Misif) and the Malaysia Steel Association (MSA) have put the current tight steel supply situation domestically and internationally to the recent cancellation of steel supply contracts by Chinese sellers.
MSA said over-reliance of imports of steel products into Malaysia at artificially unsustainable low prices over the past few years has undermined the viability of the Malaysian steel industry by decimating its strategic role to buffer against international steel shortages.
“As steel users continued to rely excessively on artificially cheap imports of steel products from China, it caught everyone by surprise that the Chinese steel prices skyrocketed beginning this year,” Misif said in a statement yesterday.
“With China preferring to meet its local demand, given the recovery in domestic prices rather than export, China suppliers cancelled a large number of steel contracts signed prior to the price surge, thus resulting in shortage for those who rely on them for their regular supply,” it added.