KUALA LUMPUR: Deputy Minister of International Trade and Industry Datuk Ahmad Maslan has urged steel sector to consolidate to remain resilient and sustainable while industry players believe the worst is over.
"Steel industry must seriously look into the need of consolidation," he said at the 12th Conference on Status and Outlook of the Malaysian Iron and Steel Industry on Thursday.
"Apart from mergers and acquisitions, the industry can consider domestic partnership for potential joint venture to realign production to meet demand in both domestic and export markets," Ahmad Maslan said.
The local steel industry has been suffering from overcapacity due to influx of China's steel imports.
According to Malaysia Iron and Steel Industry Federation (MISIF), imports from China increased from 900,000tonnes in 2011 to 3.4 million tonnes in 2015.
The price slump and the flood of cheap steel from China at below cost price in the global market had led to the low utilisation capacity of local steel mills to 40% between 2013 and 2015.
However, MISIF president Datuk Soh Thian Lai said that "the worst is over" for the steel sector on the back of recovery in global steel prices.
"Steel price is on the way to recovery as China is cutting their production," he told reporters.
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