Chow Chong Long ... We expect demand to stabilise in the second half of the year as domestic construction activities go into full swing
Its president, Chow Chong Long, said consumption was expected to post a “recovery” in 2010 but “it would probably take a few years” for demand to be able to re-test its peak volume of 8.7 million tonnes achieved in 2007.
“We are probably at the bottom, or at least near the bottom, in terms of demand and prices,” he told a press conference after the opening ceremony of South East Asia Iron and Steel Institute’s conference and exhibition 2009.
Steel bar price in the domestic market had plunged from a high of RM3,800 per tonne in July 2008 to around RM2,000 per tonne in recent weeks. Chow said prices might creep up higher in the coming months, as new orders from the construction sector gained traction.
“We expect demand to stabilise in the second half of the year, as domestic construction activities go into full swing, boosted by the implementation of projects under the two economic stimulus packages,” Chow said.
Reflecting the trend in the global market, local steel consumption plunged more than 50% in the last quarter of 2008 and continued to be depressed during the first three months of this year.
Chow said while domestic demand was showing early signs of a rebound, the sharp drop in the early part of the year would weigh down on the country’s full-year consumption forecast.
The huge decline in domestic steel consumption projected by MISIF this year is also much lower than the 14.9% drop prediction in global consumption forecast by the World Steel Association.
The sharp contraction may have forced local steel millers, including Ann Joo Bhd and Perwaja Holdings Bhd, to delay their production capacity expansion and factory upgrade plans this year.
Currently, local steel millers are mainly skewed towards producing construction steel. While Malaysia’s production capacity in terms of tonnage “exceeds” total usage, the country still imports the bulk of its steel requirement.
Government figures showed total iron and steel products exports amounted to RM10.5bil in 2008, while imports stood at RM28.7bil.
By The Star (by IZWAN IDRIS)
Its president, Chow Chong Long, said consumption was expected to post a “recovery” in 2010 but “it would probably take a few years” for demand to be able to re-test its peak volume of 8.7 million tonnes achieved in 2007.
“We are probably at the bottom, or at least near the bottom, in terms of demand and prices,” he told a press conference after the opening ceremony of South East Asia Iron and Steel Institute’s conference and exhibition 2009.
Steel bar price in the domestic market had plunged from a high of RM3,800 per tonne in July 2008 to around RM2,000 per tonne in recent weeks. Chow said prices might creep up higher in the coming months, as new orders from the construction sector gained traction.
“We expect demand to stabilise in the second half of the year, as domestic construction activities go into full swing, boosted by the implementation of projects under the two economic stimulus packages,” Chow said.
Reflecting the trend in the global market, local steel consumption plunged more than 50% in the last quarter of 2008 and continued to be depressed during the first three months of this year.
Chow said while domestic demand was showing early signs of a rebound, the sharp drop in the early part of the year would weigh down on the country’s full-year consumption forecast.
The huge decline in domestic steel consumption projected by MISIF this year is also much lower than the 14.9% drop prediction in global consumption forecast by the World Steel Association.
The sharp contraction may have forced local steel millers, including Ann Joo Bhd and Perwaja Holdings Bhd, to delay their production capacity expansion and factory upgrade plans this year.
Currently, local steel millers are mainly skewed towards producing construction steel. While Malaysia’s production capacity in terms of tonnage “exceeds” total usage, the country still imports the bulk of its steel requirement.
Government figures showed total iron and steel products exports amounted to RM10.5bil in 2008, while imports stood at RM28.7bil.
By The Star (by IZWAN IDRIS)
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