MISIF and MSA call for government regulation on steel imports
Previously split between the Malaysian Iron Steel Industry Federation and Malaysia Steel Association, players in the countrys steel industry are joining forces to seek the governments aid to regulate the mechanism on imported steel products into Malaysia.
Mr Chow Chong Long president of MISIF said that both MISIF and MSA want the Government to consider strengthening its policy on steel import for export, the license manufacturing warehouses status, zero import duty of foreign finished products and steel grades not locally produced in Malaysia.
He added that The working relationship between MISIF and MSA is improving now as both parties have found common grounds on areas that needed immediate attention given the influx of cheaper imports of finished steel products which are threatening the local steel products. We are also pushing for the setting up of Malaysia Steel Institute.
One common area which MISIF and MSA want the government to iron out immediately will be the influx of cheaper imports of boron added steel products.
He added that We are also pushing for the setting up of Malaysia Steel Institute, which will be an independent body that will give recommendations to International Trade and Industry Ministry and other relevant government bodies on the development, issues and crisis faced by the local steel sector.
In Malaysia, many locally manufactured finished steel products are still unable to compete against similar imported finished steel products, which have zero import duty.
A Lion Group spokesman concurred that its unit Megasteel Sdn Bhd which produced hot rolled coils along with local downstream producers of cold rolled coils, coated steel and pipes were overwhelmed by imports.
This includes imports especially from China in the guise of boron-added steel products under alloy tariff codes with no duty which are brought in by traders or stockists.
Under the National Steel Policy, only manufacturers are eligible to apply for duty exemption. Thailand in fact was quick to respond to such tricks by imposing anti dumping duties and to devise strategies to develop its steel industry. Lion Group is urging local policy makers to look at the whole value chain in the steel sector.
Within three months, Thailand had reacted to the boron steel issue by imposing AD duty of 19.47% on such steel imports from China.
Therefore, Lion Group as one of the major steel players in Malaysia is urging local policy makers to look at the whole value chain from HRC to CRC to coated steel (ie colored sheet, hot dipped galvanized sheet, electro galvanized sheet) to pipes, as well as the disruption to the entire value chain in terms of loss in market share, revenue and value add due to the rampant imports.
The spokesman said that We must take heed of what other countries are doing to nurture and develop their steel industry with their pre-emptive measures in the form of AD and safeguard duties, and non-tariff barriers such as industry standards, stringent importation and testing procedures. Speedy implementation of such measures by our policy makers is necessary to create a level playing field for our local steel industry and allow us to grow and be competitive both domestically and internationally.
On the predicament of local flat steel manufacturers, he said that Local CRC mills are facing huge imports of CRC and galvanized steel sheets (the CRC mills biggest sectoral customer) which can be supplied by the local CRC mills.
An estimated 850,000 tonnes of various CRC materials were imported last year, of which more than half or 450,000 tonnes can be produced locally.
The spokesman said that This 450,000 tonnes could have been the local CRC mills market. Similarly, 680,000 tonnes of coated steel materials were imported, of which 300,000 tonnes can be supplied locally. Likewise, 680,000 tonnes of pipes were imported, of which 200,000 tonnes are available locally. These substantial imports which can be produced in Malaysia are affecting the entire value chain of the local steel industry and threatening the survival of the domestic steel makers.
Citing Megasteels HRC, he said the products were produced with the latest technology and comparable to HRC from other countries.
The spokesman said domestic steel price was always higher than the international price in almost every country as commonly stated in the Metal Bulletin price list. He pointed out that the international price is based on marginal costing and dumping price; and this applies not just to HRC but to all the steel products including CRC, colored sheet, hot dipped galvanized sheet, electro-galvanized sheet and plates.
Source – The Star