Posted on 11 Jan 2016
"We are now in discussion with our trade lawyer on the next course of action," it said in a statement last Friday.
Megasteel said the Ministry of International Trade & Industry (Miti) issued the notice last Friday.
"The notice states that the investigating authority has found that there was an increase in imports of the products during the period of injury determination from Jan 1, 2014 to Dec 31 2014, but the increase of the imports is not significant, and has not caused or threatened to cause serious injury to the domestic industry," it said.
To recap, Miti initiated a safeguard investigation on imports of HRC following a petition lodged by Megasteel, the country's largest HRC producer.
In its petition, Megasteel requested the government to impose safeguard duties on imports of HRC at the rate of 40% on top of the existing 15% import duties on the product, with the rate to be gradually reduced over four years.
Megasteel said its petition for safeguards on HRC fulfilled the three main requisites of surge in imports, serious injury and causal link.
Megasteel alleged that the authorities had used different sources of import data and had excluded duty-exempted quantities which therefore showed a much reduced total import figure. It noted that under World Trade Organisation Agreement Article 15, all import quantities must be taken into account, and there must be consistency in the use of import data.
Megasteel also said that in its petition, it submitted evidence of serious injury suffered due to the drastic drop in orders caused by imports, resulting in a drastic loss of market share and a sharp decline in its production volume, as well as deterioration in the company's shareholders' funds to negative.
"All these data, including our losses totalling RM1.24 billion for the three-year period of 2012-2014, were submitted in our petition to the authorities which unfortunately do not deem the losses as serious enough," it said.
Megasteel explained that the current depressed situation in the local HRC market is caused by cheap imports dumped by China which has triggered other foreign producers to also sell their coils at low prices. This had led to price suppression of its local coils, resulting in huge losses.
The majority of the Chinese mills, it noted, are state-owned enterprises and, despite enjoying huge subsidies, are showing massive losses in their accounts.
"The excessive imports have greatly reduced our local orders and our production level. As a result, we are not able to achieve economies of scale and hence our unit cost per ton has increased. Despite this, the authorities have stated that there is no causal link to show that Megasteel's injury is caused by imports," it said.
