Malaysian steel price increase slows down and the trend will follow China
----Interview with Mr. Felix Tan
General Manager
Vim Advance Trading Sdn. Bhd.
- Located in Johor, adjacent to Singapore, Vim Advance Trading Sdn. Bhd. was established in 2006. The company mainly engaged in cold drawn wire and rebar processing business.
- Asian Metal: Mr. Tan, thank you for taking our interview. Please introduce your company firstly.
- Mr. Tan: Thank you. Our company mainly engaged in cold drawn wire which is made of wire rod, and customers include building contractors and developers. In addition, we have also started rebar processing business in recent years to help customers to process rebar to a certain size. The company's monthly trading volume is 800-1,000 tonnes.
- Asian Metal: What is the situation of Malaysian construction steel market at present?
- Mr. Tan: Basically, the steel market in Malaysia has slowed down recently, because in recent years, the development of Malaysia is relatively fast, and the inventory of the real estate is still high. It will take some time to digest these stocks. So the demand for steel has slowed down a little. However, as a whole, the steel market in Malaysia is still relatively healthy.
- Asian Metal: In the past year, China's domestic construction steel prices kept going up sharply, and the price of rebar generally increased by about 40%. Is the same situation in Malaysia?
- Mr. Tan: It is the same in Malaysia, and prices have also been rising. In particular, prices of rebar Ф10-12mm have increased to about MYR2,850/t. Personally, I think China has led the price trend of global steel market. As long as China's price goes up, the international price will follow suit, so the price in Malaysia will increase as well.
- Asian Metal: Many Chinese exporters complain that Chinese steel export prices are not competitive in the international market, and it is difficult to export. Is the import of steels from China reduced in Malaysia at present? Do you have any suggestions for China's steel export?
- Mr. Tan: That's true. For this reason, Malaysia's steel imports from China have also decreased a lot. In addition, the government of Malaysia has imposed an import tax on Chinese steel products. At present, there is no advantage in China's steel exports to Malaysia.
- However, I think the Chinese government is doing a good job in encouraging China's steel exports. For example, it recently announced the news of tax reduction on rebar export, so export prices will have certain advantages in the future.
- Asian Metal: Where do you purchase materials? What about the production of Malaysian steel mills?
- Mr. Tan: Currently our company is mainly purchasing steel products from domestic market. Since last year, the profits of Malaysian steel mills have been quite impressive. Because imported steel products have decreased in domestic market, customers have to purchase from local steel mills, and their orders are quite sufficient.
- Asian Metal: How about the demand from downstream industries in Malaysia?
- Mr. Tan: As a developing country, Malaysia is doing well in exporting its downstream products to other countries because of the geographical location and the factors of some countries. The development of downstream industries is basically healthy.
- Asian Metal: Do you think if Malaysian construction steel prices will increase further in the near future?
- Mr. Tan: Steel prices in Malaysia have increased a lot in recent months. As I said, Chinese steel prices have a great impact on the Malaysia market. So once China's steel prices fluctuate, those in Malaysia will follow suit.
- Asian Metal: Do you have any new plans and goals in 2018?
- Mr. Tan: We are currently dealing with the business about cold drawn wire and round steel bar which are used for construction. This year we will start to do welded wire mesh, then we are ready to explore the international market and export to Singapore and Indonesia.
- Asian Metal: Thank you for your kind support. Wish you and your company a great success in the future.
