Steel imports solution in sight

PETALING JAYA: The construction industry is in the final stage of discussion with the Government to iron out hitches in steel import procedures.

Effective May 12, the Government liberalised the prices of steel bars and allowed the import of steel bars free of tax. However, there has been some confusion at the Customs level.

Master Builders Association Malaysia (MBAM) president Ng Kee Leen said the discussion with the Government on the final details was expected to be completed soon.

“After four months of discussion, we have received a letter from the Customs Department agreeing that Malaysian standard MS146 is equivalent to British Standard BS4449. The confusion was one of the reasons for the steel bar import hitches,” he told StarBiz yesterday.

MBAM and the Real Estate and Housing Developers Association are leading the industry players in the discussion.

Since the Government lifted the ceiling price on steel bars and allowed the import of all steel bars that met the MS146 standard five months ago, there has been confusion on the ground as to the types of steel that can be imported tax-free.

“The Malaysian Customs did not realise that BS4449 steel bars were actually equivalent to the MS146. Thus, many international steel bars that met the BS4449 standard were not allowed to be imported just because of the different steel bar code,” Ng said.

“In addition, some Customs officers asked for import duty and import licence even though the Government had fully liberalised the steel market.

“The message of liberalisation was not understood by the Customs officers who worked on the ground. Hopefully, after this discussion is completed, the procedures and process of importing steel would be clear to all parties.”

Ng said the “full liberalisation” would be a positive move for the construction industry, as it would lower domestic steel prices to match those of neighbouring countries, which are about 10% to 15% lower. Currently, Malaysian steel bars cost about RM3,200 per tonne.

A source said that domestic monthly steel consumption had plunged to below 100,000 tonnes from about 200,000 tonnes in July in anticipation of the “full liberalisation” of steel imports.

Meanwhile, in a statement yesterday, Ng urged manufacturers, trading houses, distributors and Tenaga Nasional Bhd to adjust their prices accordingly, given that fuel prices had fallen recently. This would ensure that the benefits would be passed down to contractors.

“When the fuel prices increased in June, nearly all building materials’ prices jumped by 15% to 30%. The increase in diesel prices also caused transportation and machinery operation costs to rise tremendously by between 30% and 40%. All this happened in June.

“However, when world crude oil prices fell below US$65 per barrel and local fuel prices were adjusted downwards twice, transportation rates remained the same. Input prices have fallen but nearly all of the construction materials have yet to be reduced in price,” he said.

By The Star (by Law Kai Chow)