Last week Chinese investors (China Metallurgical Corporation, CCCC International Investment Holding Co. and Wenan Iron & Steel Co.) confirmed to the Malaysian authorities that they have a plan to build a 10 million mt per year steel plant in Samalaju Industrial Park in Bintulu, Malaysia. The construction is expected to start in the middle of next year.
The project was announced in 2017 and it was expected that the startup of the plant would be in 2020. However, weak domestic demand in Malaysia and slow financial inflow led to the delay of the project.
President of the China Metallurgical Corporation, Zhang MengXing, said that the proposed production capacity is 10 million mt per year instead of the originally announced 3.5 million mt per year.
Market participants think that it is unlikely that the construction will be started in time, because “it is not the right time, demand is weak and oversupply is there,” a Malaysian source said. After the launch in Malaysia of Alliance Steel, a longs steel producer with 3.5 million mt of steel capacity, export shipments from the country increased due to high competition and not enough consumption in the local market.
