Posted on 18 Mar 2020
Malaysian steelmakers were caught by surprise about having to suspend production on Wednesday but were complying as the government moved to slow the spread of the coronavirus by suspending all non-essential business, sources said.
Most major steelmakers were Tuesday scrambling for further details and asking the relevant ministries to allow steel production to continue. However it seemed that by evening, most had resigned themselves to complying with the suspension, sources told S&P Global Platts.
The suspension period however varied among the mills, with some unable to comment until further details became available. A source from a mini-mill said his company was shutting down production till March 31, when the government's two-week order expires.
"Even if some mills were to continue production, there might be issues with raw material deliveries as well," an electric arc steelmaker said. "That would have hindered production either way."
Malaysian steelmakers generally had a tough 2019, with most attributing this to overcapacity as mills were producing similar products resulting in most of them posting losses.
"With the situation looking like this in 2020, this year is going to be far worse than last year," another steelmaker said. "We will be suspending the furnace effective tomorrow [Wednesday] till further news. Electric arc furnace mills will be better able to react to such suspensions than their blast furnace counterparts."
Source:S&P Global Platts
