Builders, developers lament high steel price

Builders, developers lament high steel price
By Kamarul Yunus
ahmadk@nstp.com.my


April 20 2007


THE government’s decision to raise the ceiling price of steel bars and billets by up to 20 per cent to meet the demands of steel millers has been opposed by builders and developers.
The likely end losers, they said, would be development projects and property buyers.

The Real Estate and Housing Developers’ Association of Malaysia (Rehda) at a joint Press conference with Master Builders Association Malaysia (MBAM), Malay Contractors Association Malaysia (PKMM), Indian Contractors Association Malaysia (PKIM) and Association of Chinese Chambers of Commerce and Industry (ACCCIM), yesterday said houses would probably cost more.

“The hike in the price of steel bars will eventually transfer to the lower-income group,” PKMM president Datuk Roslan Awang Chik said.

Steel millers have been asking the government to raise the ceiling price for steel bars and billets, saying it was not in line with international pricing.

There have been accusations within the construction sector of millers exporting the materials to get better prices, thus creating an artificial shortage in the domestic market.

The government agreed this week to raise the ceiling prices for billets and steel bars by up to 20 per cent.

What the property and project developers want instead is a liberalisation of the steel market so that they can import essential construction material, instead of relying on domestic millers. Eventually, competition would drive steel prices down.

They said if the government imposed a ceiling price for the materials, it should allow imports and ban exports.

The contractors and developers also asked the Domestic Trade and Consumer Affairs Ministry to monitor adherence to the new ceiling price among millers and protect them from further surcharges such as for transportation.

The contractors and developers also claimed that the increased prices could disrupt the delivery system of projects under the Ninth Malaysia Plan (2006-2010).

“Contractors may not be interested to bid for projects, as they would not be able to get the steel supply at a reasonable price,”they said.