Posted on 06 May 2025
The Malaysian iron and steel industry has raised concerns over the threats from surging imports, unfair trade practices, and rising operational burdens, and is puzzled by the lack of action by MITI’s Independent Steel Committee despite a thorough review and report submitted.
The association said numerous engagements by MITI with MISIF and MSA, has been conducted with no discernible progress or action taken by the government on its findings to date.
It noted that the sector faces severe and persistent challenges, including chronic overcapacity, low capacity utilisation, rising input and energy costs, sluggish domestic demand, and growing threats from unfair trade practices. The headwinds it added threatened the viability, competitiveness, and sustainability of every part of the steel industry value chain.
The associations noted that governments around the world have been adopting a variety of strategies to help their steel industries. For example, the UK parliament passes an emergency law, allowing the government to take control of the Chinese-owned British Steel plant, which employs around 2,700 people and produces steel crucial for UK industries, including construction and rail transport.
ArcelorMittal France faces challenges due to the U.S. tariffs, announced plans to cut approximately 600 jobs across seven French sites, citing the need to reorganize operations to remain competitive. This decision has prompted the French government to seek stronger protective measures against Chinese steel imports, aiming to safeguard the domestic industry.
In light of these compounding pressures, the Malaysian Iron & Steel Industry Federation (MISIF) and the Malaysia Steel Association (MSA) has jointly called on the Government to take immediate, bold and decisive action. Coordinated intervention is urgently needed to prevent long-term damage to the industry and safeguard national production capabilities.
Among the key priorities that the association said need urgent government action are:
Addressing Chronic Overcapacity
Chronic overcapacity remains one of the most critical structural issues — a consequence of past policy decisions. Government leadership is essential in developing a coordinated, long- term solution to rebalance supply and demand and support industry rationalisation. With most of the public listed steel companies in dire strait, to avoid systematic risk to the stock market and banking sector, it is of utmost priority and urgency to resolve the overcapacity issue by providing protection to the Malaysia steel industry.
Combating Unfair Imports and Dumping
While ASEAN peers such as Vietnam, Indonesia, and Thailand have introduced anti-dumping duties and safeguards to protect their domestic industries, Malaysia remains highly vulnerable. The country risks becoming a dumping ground for excess global steel. MISIF and MSA respectfully urge MITI to strengthen its Trade Practices Section to be more receptive and proactive in investigating and addressing trade complaints. Without swift and effective trade remedies, the Malaysian steel sector faces deep and irreversible harm — including rising idle capacity, plant closures, and widespread job losses.
Containing Electricity Tariffs and Energy Costs
Steelmaking is energy-intensive, with electricity being one of the industry’s largest cost components. As Malaysia moves toward its decarbonisation goals, the transition must be underpinned by affordable and stable electricity pricing. Benchmarking of competitive electricity tariffs of neighbouring countries i.e. Indonesia and Vietnam, is crucial to provide a level playing
field.
The industry is appealing for the Government to introduce a Special Industrial Tariff to support steelmakers during this period of severe strain. Other industrialised nations — including the UK and Germany — have adopted targeted measures to lower energy costs for their steel sectors. Malaysia must follow suit to remain competitive and to attract sustainable, future-ready
investments.
Minimising Additional Regulatory Burdens
At a time of extreme market difficulty, new compliance costs could have unintended consequences. The following measures risk further burdening the industry:
Source:BusinessToday
