[Fellow]The Malaysian government has reintroduced stricter pandemic restrictions since January 13, which has brought uncertainty to the local steel industry.
The Malaysian government has reintroduced stricter pandemic restrictions since January 13, which has brought uncertainty to the local steel industry. Some sources expect that scrap delivery may be delayed and the recovery of the downstream market may be reversed.
Malaysia's Ministry of trade and industry said that Penang, syrango, Malacca, Johor and Sabah, as well as Kuala Lumpur, Buchang and neven, the three federal territories, will be subject to movement control within two weeks until January 26.
Although production and steel production will be allowed to continue, two weeks of interstate transportation could be a problem under certain safety related restrictions.
"Because these major countries are blocked and roads are blocked, passenger flow will definitely be affected," said a trader based in Kuala Lumpur Kuantan (on the East Coast) and Penang (in the North) have their own ports and local waste supplies, but a large part of Malaysian waste comes from the capital, where transportation may face some problems
Domestic logistics disruption may cause short-term upward pressure on domestic waste prices. Sources speculated that trucking companies or shipyards might consider the extra fuel costs and divert their transportation routes to factories farther away from the city.
As the shipping market is bullish, domestic scrap metal prices have been in an upward trend. For example, prior to the blockade, bonus grade scrap delivered to Kuantan steel on January 12 had reached 1680 Mr / MT (US $413 / MT), an increase of 370 Mr / mt since the beginning of December.
At the same time, in terms of product markets, the blockade may once again inhibit trade activities in downstream industries such as construction and automobile production, reversing the recovery of the past six months.
Since the beginning of December, the market price of 12mm diameter steel bar has increased by 300 Mr / MT and is in the range of 2600-2650 Mr / MT (US $640-652 / MT) on January 12.
"Finished product sales are likely to decline again, just as we faced with the first MCO in March," said a mill source at Klang. "We may have to adjust production, but we will pay close attention to changes in customer demand."
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