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27 Jun 2012

Trafigura agrees $156 mil steel offtake accord with Malaysia's Masteel

Platts

Trafigura has agreed a three-year, $156.5 million offtake agreement to purchase steel billets and bars from Malaysia Steel Works, the commodities trader said Wednesday.

The offtake agreement will begin in the second half of 2012, Trafigura said in a statement.

Masteel has a crude steel capacity of 550,000 mt/year at Bukit Raja and a rolling capacity of 350,000 mt/year at its Petaling Jaya-based works. This allows for a 200,000 mt/year surplus of billets.

Trafigura, which is an active player in the semi-finished billet market globally, purchasing tonnage from the Black Sea, Turkey and major Asian producers, said the agreement is part of a trend of eastward movement in its trade activity.

"In recent years, we have witnessed a major shift in our customer base, one which is moving eastwards from the European and American markets. Trafigura is responding to that shift by increasing our activities in the Asia Pacific region," Dominic Watters, the managing director of Trafigura Pte Ltd, said.

Masteel produces deformed steel bars, round bars and billets. It exports 30% to 40% of its products and has 68 domestic dealers in the Pacific region.

--Ciaran Roe, ciaran_roe@platts.com
--Edited by Alisdair Bowles, alisdair_bowles@platts.com

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