The Malaysian Iron and Steel Industry Federation (MISIF) is anticipating that demand for steel in Malaysia will increase by 6% for a couple of years in a row.
But that’s improbable to improve the fortunes of Malaysian steel companies owing to import penetration, Malaysia-based Hong Leong Investment Bank Research Stated in a November 12 research note.
“We walked away from the recent steel conference with a neutral feeling about the sector due to the insistent overcapacity issue in China,” it stated.
At a national steel conference in Petaling Jaya organized and held by MISIF last month, the steel federation forecasted Malaysia’s apparent steel consumption will hit 10.7 million tonnes by the end of this year, up 6.5% over 2013, before expanding further to reach 11.3 million, underpinned by continuous construction and infrastructure spending as well as property development activities.
But, imports are eroding the market share of Malaysia’s local steelmakers, and the bank wasn’t overly exhilarated by the possibility of trade remedies to safeguard local suppliers.
MISIF has tabled a chain of proposals to the Ministry of International Trade and Industry (MITI) with the vision that further measures are required to protect the local industry.
“Dumping activities” from China looked possible to persist in the medium term unless MITI implements a more effective and efficient anti-dumping policy, the bank analysts stated.
“Whilst we took comfort that [the government] may introduce additional measures in protecting the local steel producers’ interests, we think such issues will likely continue to be a long-drawn affair,” the analysts said. There have been “too many unsuccessful attempts, historically” to protect the local industry, it suggested.