Posted on 08 Nov 2016
The Steel Wire Association of Malaysia (SWAM) is “disappointed and perplexed” over the imposition of provisional safeguard duties of 13.9% on imported steel wire rods and deformed bar in coils products from Sept 27.
“It must be emphasized that anti-dumping duties had already been imposed on steel wire rod imports for a five-year period from February 2013,” said SWAM in a statement. “Any further protection for the petitioning companies would be an overkill.”
The association urged the investigation authority to consider the disastrous effect of the imposition of any safeguard measures on downstream manufacturers that are already operating in a very challenging market.
“(Belgian-based) NV Bekaert SA, world market leader in steel wire products, has recently announced the closure of its Shah Alam plant by July 2017, citing fierce price pressure and unsustainable business results. The imposition of provisional safeguard duties will substantially worsen the sustainability of the Malaysian steel wire industry,” it warned.
SWAM has more than 50 members, including the subsidiaries of at least five public-listed companies — Perwaja Holdings Bhd, Chin Well Holdings Bhd, Engtex Group Bhd, Leader Steel Holdings Bhd and YKGI Holdings Bhd.
To recap, the international trade and industry ministry (MITI) initiated a safeguard investigation on imports of steel wire rods and deformed bar in coils products based on a petition lodged by the Malaysia Steel Association (MSA) on behalf of Amsteel Mills Sdn Bhd, Ann Joo Steel Berhad, Southern Steel Rod Sdn Bhd.
A public hearing was held on Aug 1 in MITI’s office where interested parties and stakeholders including SWAM and the Master Builders Association Malaysia (MBAM) voiced their opposition to any proposed safeguard measures requested by MSA.
SWAM, in its statement, reiterated that MSA’s request for safeguard duties is unsustainable when the latter admitted during the public hearing that the petitioning companies themselves imported at least 118,000 tonnes of steel wire rods during the period of investigation.
“Documentary evidence showed that at least one of the petitioning companies sold imported steel wire rods to Malaysian users, (while) the safeguard petition included products which the petitioning companies do not produce,” it said.
SWAM also questioned the need for the imposition of such safeguard duties, considering at least one of the petitioning companies had been making good profits beginning this year.
“As a safeguard measure is an emergency measure, the fact that at least one of the petitioning companies is making good profits undermines the entire basis of the safeguard application,” it said.
SWAM also pointed out that beginning July 2013, all steel wire rods under HS Code 7227 can only be imported into Malaysia using approved permits (AP) issued by MITI.
Hence, there is “little justification” and “contradictory” to include imported alloy steel wire rods in the scope of the safeguard investigation when these are government approved imports.
“In any event, any increase in the import volume of government approved imported alloy steel wire rods during the period of investigation clearly is foreseeable and no safeguard measures are applicable on them,” said SWAM.
The association also expressed the hope that the government will not neglect the downstream steel players, in order to benefit the petitioning companies that have been long protected and are already recording good profits beginning this year.
“We urge the investigative authority to look at this matter objectively and to give due consideration to all the issues raised by interested parties in this investigation,” it said.
