Steel Sector Hugely Impacted by Lockdowns Amidst Robust Export Market

The prolonged shutdown has resulted in damages to furnaces and equipment, it added.

SEATTLE (Scrap Monster): The domestic steel sector in Malaysia seems to be badly impacted by prolonged shutdowns on account of Covid-19 lockdowns, being unable to take advantage of the robust export market situation.

According to Malaysia Steel Association (MSA), the steel manufacturers in the country, especially in Selangor and Kuala Lumpur, are reportedly faced with huge financial losses. Any further extension of lockdown restrictions will have serious consequences on manufacturers and businesses. The prolonged shutdown has resulted in damages to furnaces and equipment, it added.

Global Steel Market to Encounter Short-Term Headwinds

The restrictions have forced domestic manufacturers to stay away from exports markets, thereby impacting their revenues. The local steel exports had contributed RM5 billion in the initial four-month period this year. The export industry is projected to remain robust in the forthcoming months. The domestic steel makers could take benefit of the strong export market only if operations return to normal.

The MSA urged the government to announce relief and stimulus measures in support of larger corporations, which is believed to contribute over 61% of the country’s GDP per annum.