KUALA LUMPUR: Due to the cheap imports, the growing disparity between imports over exports continues to haunt the iron and steel industry, in which the import-export gap is expected to widen from 1.02 million metric tonnes (mt) in 2009 to over 5 million mt.
Malaysian Iron and Steel Industry Federation (MISIF) president Dato Soh Thian Lai said the first six months of this year pointed to a much wider import-export gap of over 5 million mt as the export of steel from January to June this year was 1.41 million mt, compared to import of 4.03 million mt.
Soh commented this at the 2015 ASEAN Iron and Steel Sustainability Forum, which is organised by the South East Asia Iron and Steel Institute (SEAISI) and co-hosted by the MISIF with the Construction Industry Development Board (CIDB), as supporting organisation.
The import over export gap of iron and steel products has increased from 1.02 million mt in 2009 (export: 3.02 million mt, import: 4.04 million mt) to 4.96 million mt in 2014 (export: 2.77 million mt, import: 7.73 million mt), based on his statistics.
“Due to cheap imports from China, average steel capacity utilisation in most sectors of the industry has performed below the 50% level,” Soh said.
He added that despite the construction industry showing resilience and consistently impressive performance, the iron and steel industry in Malaysia was facing severe competition from imports.
Soh therefore urged the authorities to further promote and enhance the usage of locally-produced iron and steel products in the socio-economic development of the country.
For Soh, the adoption of Industrialised Building Systems (IBS) in the construction sector is still low, probably below 20% of the overall projects in the country and that the provisions for iron and steel products under IBS is even lower and negligible.
However, he sees the 2016 Budget, which included a funding allocation of RM500 million to promote IBS, as a positive move.
Meanwhile, CIDB chairman Tan Sri Dr Ahmad Tajuddin Ali expects the construction industry continues to register double-digit growth next year.
“We still target for double-digit growth, underpinned by various projects, such as MRT 2 projects,” he said, adding that growth could be better than this year.
He expects the industry to record a bigger growth of projects this year. The construction industry recorded RM102 billion worth of projects in 2011 and had grown incrementally to RM157 billion in 2014.
SEAISI chairman Roberto Cola also expects the demand of construction grade steel in ASEAN to grow for several years.
The construction sector accounts for more than 70% of steel consumption in ASEAN.
Nevertheless, facing the influx of steel products from China, Roberto Cola opined that ASEAN steel manufacturers need to find ways to differentiate and add value to their products so that they can enjoy the advantage of local relationship and proximity to their customers.
