December 02, 2008

Ann Joo sees steel prices correction under free market

Ann Joo Resources expects that average steel prices to increase in Malaysia under a free market scenario initially due to strong global demand but would likely come down eventually due to a possible correction.

Mr Datuk Lim Hong executive director of Ann Joo Resources after the annual general meeting said that "We actually prefer a free market, all the while from day one.”

He added that the government should decide on allowing prices to be determined by market forces fast as it will help the construction industry to make better decisions relating to costs.

Mr Lim said that the country's construction sector is ready for a free market as it would help counter the current high cost of building materials as it would allow market forces to dictate prices of steel bars. He said that "We are exporting into the international market that means we are also ready to go for the free market.”

Mr Lim said that the domestic selling price has to track very closely international prices. He added that "As steel millers, we are importing a majority of the scrap metal or about 70% at international price.”

Mr Lim said that Ann Joo's performance would continue to be strong not because of the open market but because global world steel demand is very strong.