The Malaysian government has imposed a lockdown from March 18 until March 31, during which all travel will be prohibited and all non-essential businesses will be halted. The majority of miners in Malaysia, including iron ore producers, have already stopped operations and BF-based steel mills have also been forced to reduce work to a minimum.
According to sources, Alliance Steel with a total of 3 million mt of steelmaking capacity and Eastern Steel (0.7 million mt per year) have already started the process of reducing production. These mills’ share of local iron ore consumption is as high as 40 percent.
At the same time, EAF-based producers in Malaysia are still working. The major problem for them has not been raw material supply, but extremely weak finished steel prices. One EAF-based mill has been looking to purchase import billet to balance its costs, but the bid price has not been acceptable to suppliers.