Reuters reported that Perwaja Steel has delayed expansion plans and is running at half its capacity as it braces for the country's first recession in 10 years.

Mr Pheng Yin Huah MD of Perwaja Steel said that it has no plans to restructure its borrowings or tap shareholders to raise fresh capital. He added that "Global steel prices will remain highly volatile this year. It would be good enough if we can just break even this year."

He said that the price of steel billets has dropped nearly one fifth over the past two months to below USD 350 per tonne. He added that "The goal is not to make money, but to make sure we can sail through the crisis by carefully planning our purchasing and other cost saving measures."

Mr Pheng said that Perwaja has delayed two projects worth about MYR 600 million to build a new electric arc furnace and a new blast furnace given the uncertain economic environment. He added that "Everyone in the industry is taking a defensive stance now and this is not a period to be offensive."

(Sourced from Reuters)