Posted on 25 Nov 2012
Many steel players were not surprised by Megasteel Sdn Bhd's withdrawal of its petition against imported hot-rolled coils (HRC) from Taiwan.
Megasteel, a unit of Lion Group, has made a formal request to the International Trade and Industry Ministry (Miti) to terminate the anti-dumping probe into the import of HRC from Taiwan that was initiated on July 27 this year.
“It was a weak case in the first place. Megasteel might have felt pressured to withdraw its petition for the sake of restoring its long-term relationship with several HRC steel players in Taiwan, which have been exporting to Malaysia,” an industry source told StarBizWeek yesterday.
“I believe Megasteel must have reached some sort of amicable solution with the involved parties, and they will work out the supply and volume of HRC to be exported that in turn will not jeopardise Megasteel's HRC business here,” the source said yesterday.
Miti said in a statement on Thursday that the Government had, at the request Megasteel, decided to terminate the investigation the day the notice of termination was published in the Government gazette.
Under Section 26 of the Countervailing and Anti-Dumping Duties Act 1963, an investigation can be terminated if the petition is withdrawan.
Of the total HRC imported into Malaysia, it is believed that about 400,000 tonnes come from Taiwan, 200,000 tonnes from Japan and about 100,000 tonnes from South Korea.
Megasteel is the only HRC maker in production in the country although five licences have been issued since 1980.
Some industry observers expect Megasteel's 12-year-old HRC monopoly would end when three new players emerge within the next three years.
A Megasteel official declined to comment on the company's petition withdrawal, saying: “Everything on steel now falls under the purview of Miti.”
Another industry source concurred, saying domestic steel players had been warned many times by the authorities not to divulge sensitive and confidential details on the domestic steel issues to the media.
This is especially so after Megasteel and Malaysia Iron and Steel Industry Federation battled it out in the media over Megasteel's safeguard petition in June last year.
To recap, Megasteel had since May last year lobbied for a safeguard duty of 35% on imports of certain HRC, on top of the existing import tax of 25%, saying imports of HRC had increased from 2007 to 2010 and had seriously affected its production.
The safeguard petition, which was strongly opposed by the local downstream steel players, was shot down by Miti in July last year after its investigation determined imports of HRC did not threathen the domestic steel industry.
The ministry is currently working closely with the relevant government agencies and steel industry players to finalize the roadmap for the future competitiveness of the RM40bil local steel industry.
