Malaysia’s Minister of International Trade and Industry is seeking federal cabinet approval to halt the process of issuing new production permits to steelmakers.
Currently, Malaysia is determining that domestic production exceeds demand, which is similar to the situation of steel production worldwide.
Low demand combined with rising electricity costs has reduced the profitability of heavy industries over the past few years, and that means that the prospects for industry development have been significantly reduced.
Besides, global steel prices are falling due to the US-China trade war. And the wave of trade defense also rocked the global steel market.
Production license for the new plant will be delayed, however, Miti encourages and supports the merger and consolidation of steel mills. The consolidation of factories will receive many incentives and tax exemptions, the incentives will be determined in each specific case.
A prime example is the merger of ANN JOO RESOURCES BHD and SOUTHERN STEEL BHD at the ratio of 55:45 to consolidate steel business opportunities and strengthen the strength of these two plants.
A massive new project at Samalaju Industrial Park in Bintulu, Sarawak, has not yet received its manufacturing licence, delegates said on the sidelines. Wenan Steel announced that its project of 5 million tonnes/year could be expanded up to 10m t/y (see Kallanish 30 August 2019). “There has not been any official announcement so far,” a delegate said. It is a wholly-owned Chinese project and there has not been much detail on whether it will be upstream or what type of products it will make.
In recent years, Malaysia’s steel industry faces mounting challenges from international competitors, especially from China, Vietnam and Indonesia which have invested in integrated capacities, said Lim Hong Thye, president of MISIF, which has 133 member companies.
To better understand trade defense policies or technical barriers, please feel free to contact us:
Ms Lan – Juridical Manager of MRS Steel
Mobile – WhatsApp: 00 84 962343746.