The construction industry as well as housing developers and companies dealing with property management in Malaysia want the Government to lift the price control and import ban for steel bars.

The Master Builders Association Malaysia (MBAM) and Real Estate and Housing Developers Association (REHDA) also want the Domestic Trade and Consumer Affairs Ministry to curb what they allege as hoarding by local steel bar makers.

The Ministry should "regulate and enforce a transparent schedule of steel production to prevent manipulation of rolling schedules that create artificial shortages," MBAM president Patrick Wong and his REHDA counterpart Ng Seing Liong said in a joint statement.

They claim that the increases in steel prices in world markets and rise in steel exports to the Middle East have prompted manufacturers to divert their output to export markets where billets fetch higher prices than the controlled price of steel bars.

The resulting shortage of steel in the domestic market and subsequent inflation of steel bar prices in the grey market are badly hitting their members, especially those with contracts without provisions for price fluctuations.

"Many contractors have been forced to procure steel bars from the grey market to keep up with construction schedules, at more expensive prices, RM350 to RM450 above the government control price," said the statement.

MBAM and REHDA contend that while the steel price in Singapore is about S$720 a tonne, or roughly RM1,600,developers and contractors in Malaysia have to pay more than RM2,000 a tonne.

They allege that the grey market has existed for more than a decade and argue that if the situation prevails, many projects under the 9th Malaysia Plan could be hit.

"The effect of control pricing seems to be more counter-productive than protective of the industry," the statement added.

Both MBAM and REHDA prefer a free market instead, which will allow their members to source steel bars from outside the country at market prices.