Malaysian Steel Wire Rod Dealers Win Over on Anti-dumping Duties

The Star reported that it was sweet victory for many local steel wire rod makers last Wednesday when the government finally came around to imposing anti-dumping duties on SWR from selected companies in China, Taiwan, South Korea and Indonesia.

This marks the first anti dumping action on a steel product taken by Malaysia. For the past 3 years the Government had tolerated significant inflow of cheaper imported steel products including SWR into the country in the spirit of the Asean Free Trade Area and Asean China FTA agreements.

However this backfired when the influx of cheaper steel products particularly from China saw many regional steel players including from Malaysia, slashing their production rates as a result of price undercutting loss of market share, reduction in domestic sales, decline in profitability and the inability to raise capital.

The Asean China FTA is the world's largest FTA and set to liberalize billions of dollars in goods and invesments covering a market of 1.7 billion consumers.

But while the duties on many products within the region have been reduced to zero the free flow of goods and commodities that may seem positive have led to many complaints and criticism from various industries in the region.

China itself is facing over 55 trade actions on steel products taken by the United States, Europe and several Asean countries.

There is also a growing concern that the industry and government agencies would have to deal with a wider spectrum of conditions and documentations with the increased number of FTAs that have been signed as no 1 agreement is the same.

The situation has also led several affected Asian governments to actively adopt anti dumping duties, safeguard measures and other trade actions to protect their own steel industry.

More interesting is how these Asian governments are putting these anti-dumping and safeguard measures on steel products. India for instance has 33 safeguard proceedings Indonesia has 11 and the Philippines 9.

Further Indonesia has filed 11 cases with 5 on the steel industry. It has placed anti dumping measures on steel hot rolled coils from Malaysia and 6 other countries 2 safeguard measures on steel wire nails and a 145% import duty on steel wire ropes.

Thailand has also imposed anti dumping measures on HRCs from 16 countries including Malaysia.

Hence post anti dumping duties on SWR in Malaysia industry observers opine that there would be more such trade measures taken this year given the increasing number of petitions at the MInistry of International Trade and Industry level.

The latest is believed to be pertaining to imported electrolytic tinplate dumping from China and South Korea. Miti has invited input from importers foreign producers, exporters and associations before March 21st to assist the Government in its preliminary findings.

On the Asean front 6 regional iron and steel associations from Malaysia, Indonesia, the Philippines, Singapore, Thailand and Vietnam have joined forces to seek a review on the Asean China FTA in place since January 1st 2010.

These Asean players claim that trade has been lopsided only benefitting China thus far.