December 02, 2008

Malaysia removes steel price ceiling to support availability

It is reported that Malaysian government has decided to remove the ceiling price on steel in the local market effective Monday May 12th 2008. This was announced by Datuk Seri Abdullah Ahmad Badawi prime minister of Malaysia

Mr Abdullah, who is also finance minister, said that “This liberalization is in line with the government's efforts to ensure that the development projects in the country are carried out smoothly, while the market for steel remains transparent and efficient.”

He said that the “government has been receiving numerous complaints on the increasing price of steel products, namely billets and steel bars, following difficulties in obtaining steel products at the ceiling price. The problem in getting steel supply at ceiling price has given negative impact to the construction industry where it could jeopardize the country's development projects.”

The fallout of this major policy change would include

1. With the ceiling price removal, contractors for the government's conventional projects can apply to change their contract prices based on the market price for steel.

2. Importers of steel will be also exempted from getting import licenses and paying import duties

3. Local steel manufacturers will be allowed to export their steel products.