Malaysia. Government may aid flat-steel producers

Malaysia. Government may aid flat-steel producers.

Lion Group's unit Megasteel Sdn Bhd said the Government has agreed to explore options to assist the local flat steel products industry, while fulfilling the requirements of the Asean Free Trade Agreement (Asean FTA) and other FTAs on steel industry. One of the proposals by Megasteel, is to lower the import duty to 15% from 25% for flat steel products covering: ● Hot rolled coils (HRC) for HS codes 7208 & 7211
● Cold rolled coils (CRC) for HS codes 7209 & 7211)
● Coated coils i.e. galvanised iron (GI), electro-galvanised (EG) and coloured sheets (HS codes 7210 & 7211)
● Pipes and tubes (HS codes 7304, 7305, 7306 & 7307) Another proposal is that duty exemption will not be granted given the proposed reduction in import duty. Megasteel marketing director Lai Chin Yang told StarBizWeek that the Government had become more aware of the significant importation of HRC and other flat products from the non-Asean countries following the termination of Megasteel safeguard petition for HRC in August. In April, Megasteel had petitioned Miti to consider imposing a safeguard duty of 35% on imported HRC which were affecting the local market.

Currently, despite five HRC licences been issued, Megasteel is the only sole HRC producer in Malaysia. Lai said the proposal to reduce the import duty on flat products would not run foul with the World Trade Organisation and also, not asking Malaysia to retract its commitment under Asean FTA.
“The reduction in import duty will bring about stability in the local flat products market given the loopholes in the current system whereby there is rampant importation of HRC, CRC, GI sheets, EG sheets, coloured sheets and pipes from many non-Asean countries into Malaysia, which were duty exempted despite being available locally. Of the total one million tonnes of HRC imported into Malaysia last year, some 400,000 tonnes were from Taiwan, 200,000 tonnes from Japan and about 100,000 tonnes from South Korea.
“These are all non-Asean countries and do not fall under the coverage of the Asean FTA.