KOTA KINABALU – Sabah Industrial Development Ministry will ensure fair buying prices of scrap iron in view of an export ban on the commodity.
While rubbishing claims a monopoly had been created from the export ban, its Minister Datuk Joachim Gunsalam noted the prices of scrap iron are determined by market price.
Pressed by Sabah opposition leaders whether the minister would ensure that a fair price be paid to scrapyard operators, the Sabah deputy chief minister answered, “Yes”.
However, he denied that there was a monopoly when scrapyard operators were forced to sell their scrap metals below the market price to only one steel mill due to the ban.
The Vibes recently reported that scrapyard owners and collectors are facing problems after Sabah imposed the export ban.
Not only are their scraps piling up at their premises following the ban as the sole steel mill in the state, Unimekar Sdn Bhd was also allegedly buying off the scraps below the market price.
Gunsalam, meanwhile, said that the export ban on scrap iron is only temporary, saying it was done to save the state’s local metal industry.
The difficulty of our mills to acquire scrap metals has resulted in them operating below their capacity and incurring losses over five years.
“If the losses continue, they will soon be forced to stop operation and this would be a big loss for the construction sector in Sabah,” he said.
On the same note, he said 97% of scrap metal traders in Sabah are not from the state but from Peninsular Malaysia and Singapore.
He said only one of Sabah Scrap Metal Recycle Association’s members is from the state.
Gunsalam said local billet plants cannot push the market prices of scrap metals down as they are determined by current market prices.
Ensuring transparency, he said any attempt to fix prices will come under the Competition Act 2010, and that this is against the creation of any monopolies.
On cement prices, he said the ministry has no control over the higher cement prices.
“Increases in cement prices have happened over the past 10 years. Clinker prices have increased from RM174 per tonne to RM300 per tonne, which is a 78% hike,” he said.
In 2021 alone, clinker prices have surged by 40.2% from RM214 per tonne to RM300 per tonne due to the 100% in sea freight charges and coal prices.”
The bulk prices of cement have increased from RM206 per tonne to RM294 per tonne, which is a 43% surge over the same period, he said.
Gunsalam said only Cement Industries (Sabah) has absorbed the higher production costs of cement, adding that the state firm had not raised its prices since 2009.
“With these hikes, Cement Industries (Sabah) has increased their prices from 12% to 15% from RM45 per tonne or RM2.25 per kg from November 19,” he said.
Like the rest of the country, cement and steel prices have also surged in Sabah and construction players have expressed concern that the cost of building would also surge, pushing property prices in the state higher in the future. – The Vibes, December 9, 2021
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