This article first appeared in The Edge Financial Daily, on December 31, 2015.

KUALA LUMPUR: The pressure continues to mount on the Ministry of International Trade and Industry (Miti) to make a decision on whether or not to impose safeguard duties on the imports of hot rolled coils (HRCs), with Megasteel Sdn Bhd making the latest call to urge the ministry to do so “in the best interests of the local HRC industry and the nation”.

In dismissing protests by the Malaysian Iron and Steel Industry Federation (Misif) against its petition requesting the government to impose safeguard duties on the imports of HRCs, Megasteel yesterday issued a statement to say that it believes the government will do its utmost to provide and ensure a supportive environment for the local steel industry, both upstream and downstream to be competitive and sustainable.

Megasteel, the country’s biggest HRC producer, had in September submitted to Miti a petition for safeguard duties on HRC imports as the company said it had been affected by the oversupply situation due to excessive dumping.

Miti is due to release the preliminary determination report on Jan 8, 2016.

In yesterday’s statement, Megasteel also hit out at Misif for threatening to take legal action on this matter, saying it only serves to undermine the authorities’ jurisdiction even before any ruling can be made.

“Misif’s call to foreign steel players to file their case to the World Trade Organization against Megasteel’s petition not only questions Miti’s authority and the ministry’s right to accept and decide on such petitions, but most alarmingly, raises doubts on the federation’s agenda in exhorting foreign steel players to take action against local steelmakers, which can be seen as an act of subversion towards our national interests and financial stability,” it said.

Megasteel added that similarly, it reserves the right to take appropriate legal action against relevant parties should its interests be jeopardised.

The company pointed out once again that Misif’s members themselves have also filed trade remedy petitions.

“One example being FIW Steel Sdn Bhd’s petition against imports of pre-painted/painted/colour coated steel coils from China and Vietnam, with Miti having agreed to impose provisional duties of 52.1% against such imports from China, and 5.68% to 16.45% against Vietnam,” it said.

Misif had on Tuesday called for a press conference to block Megasteel’s petition, saying its members are prepared to use all means, including legal action. It said it was “cautiously optimistic” that Miti will decide not to impose a provisional measure on the importation of HRCs.

Megasteel also reiterated that it has the right to seek trade remedy measures such as anti-dumping and safeguard duties against HRC imports.

“Many countries have adopted safeguard measures against steel imports, but we have not witnessed any trade wars erupting between countries as a result of those safeguard measures. Such scaremongering of trade wars and retaliation measures by Misif is highly regrettable,” the company said.

“The safeguard measure will reduce the excessive importation of HRCs and help to save our foreign exchange and reduce the current deficit,” it added. 

Megasteel also alleged that Misif’s objectives to promote cooperation among manufacturers of iron and steel related products in Malaysia, and to promote the development of the industry, may have been “hijacked by a few parties with a different agenda whose views are not an accurate reflection of the needs of the local steel industry”.

Megasteel also stated that its HRC prices are guided by the price mechanism sanctioned by Miti.

“We have never sold above the price allowed under the mechanism. The sale of HRCs to the electronics, white goods and automotive sectors is minimal and therefore, will not cause the escalation of inflation as alleged by Misif.

“Similar to the safeguard granted for steel plates, there will be certain exclusions (from safeguard action), and we will be discussing with the authorities to allow exclusions especially for export oriented industries so as not to affect their competitiveness in the export markets,” Megasteel added.