Source: The Edge
The dumping of cheap steel products is expected to be more rampant as the US-China trade tension rises, according to the Ministry of International Trade and Industry (Miti).
“The possibility of there being dumping of steel products in Malaysia due to the trade war is very high,” said deputy minister for MITI Dr Ong Kian Ming yesterday, adding that there is also concern that Malaysia is being used as a transshipment point.
Speaking at the Malaysian Iron and Steel Industry Federation (Misif) conference on the outlook of local iron and steel industry, Ong said Miti is monitoring import statistics closely as it does not want Malaysia to be used as a hub for trade circumvention in ways that will affect local industries.
“If Malaysia is used as a transhipment point, there may be anti-dumping measures enacted against Malaysian steel companies by countries such as the US because they see our country as a possible violator of their trade (regulations),” he explained.
Given the depreciation of the Turkish lira, the local market could see lower-priced products for steel imports from Turkey, according to Misif president Datuk Lim Hong Thye.
“In the long run, we don’t think that is sustainable. But if the import from Turkey persists, we will definitely file some action with Miti’s trade practices section,” said Lim,, who is also managing director of Ann Joo Resources Bhd.
Ong said the government will “continue to enforce current safeguards and other trade remedy measures to mitigate the possible trade diversion and influx of imports.”
“We also understand that there will be continued appeals by various companies for the government to take anti-dumping and safeguard measures. Miti is committed to evaluate and investigate all these claims and appeals,” he added.
According to Lim, Malaysia has seen the import of steel products from Turkey since the US has slammed a 50% tariff on Turkish imports in early August
Addressing the weaker demand this year for steel products in Malaysia due to mega infrastructure projects being put on hold, Ong urged Malaysian steel manufacturers to diversify production and supply specialty steel to local industries such as automotive, oil and gas, as well as electrical and engineering.
“In terms of the economy’s long-term viability, I believe that as long as we provide financial stability for all the industries in Malaysia, even if some of these short-term infrastructure projects have been postponed we’ll be able to provide more business opportunities for various sectors, which will help the steel industry expand,” he said.
Malaysia’s steel industry is seen to be over-reliant on the construction industry, which accounts for some 69% of domestic demand, according to Eigis Consulting Group.