Posted on 06 May 2025
Local steel players, represented by the Malaysian Iron & Steel Industry Federation (Misif) and the Malaysia Steel Association (MSA), are urging the government to act quickly to protect the industry from overcapacity, rising unfair imports and high costs. As of February 2025, the sector supports 283,174 jobs and contributed RM28.42 billion to the 2024 gross domestic product (GDP), but its future is now under threat.
To support the New Industrial Master Plan (NIMP) 2030 and tackle long-standing issues, Miti set up the Independent Steel Committee (ISC) in January 2024. Although the ISC has submitted its policy recommendations, no action has been taken so far despite discussions with Misif and MSA.
In a joint statement on Monday, both groups warned that the industry could suffer long-term damage without urgent action. They pointed to the UK’s recent emergency law to take over British Steel as an example of bold government intervention to protect national interests.
Misif and MSA have identified five urgent issues that require government action.
First, the industry is facing chronic overcapacity, producing more steel than the market can absorb. This issue, exacerbated by past policy decisions, poses risks to both the sector and the financial market. The groups are calling for government intervention to help reduce overcapacity and stabilise the market.
Second, while neighbouring countries like Vietnam and Indonesia have introduced trade protection measures, Malaysia remains unprotected from unfair imports. Misif and MSA urge Miti to take stronger action to prevent Malaysia from becoming a dumping ground for cheap foreign steel.
Third, rising energy costs are a major concern, as steel production is highly energy-intensive. The groups are requesting a special industrial tariff to help keep energy prices competitive and encourage long-term investment in the sector.
Fourth, upcoming regulatory changes, such as a 2% EPF contribution for foreign workers and a planned increase in the Sales and Service Tax (SST) from 0% to 5%, are expected to place additional strain on the industry. Misif and MSA have urged the government to delay or reconsider these changes.
Finally, the industry is calling for the strict enforcement of the "Buy Malaysia First" policy in government procurement. Ensuring that local steel is prioritised for government projects would help boost domestic demand and support the industry's recovery.
Source:The Edge
