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Malaysia promises to introduce steel and scrap protection policies

According to reports, the Malaysian Ministry of International Trade and Industry (Miti) assured the local steel industry that a series of policy revisions will be made in 2021. Kallanish (Opening Business Information Consulting) was informed that, in particular, these amendments will make it more difficult to build new plants and export scrap steel, and extend import tariffs.

According to the Malaysian business magazine "The Edge", a letter sent to the industry in December included 6 specific measures. Miti stated that it will tighten the conditions for the approval of new manufacturing licenses, extend the current import tax until the end of 2021, and impose a 15% export tax on scrap steel.

Miti also stated that it will provide tax-free channels for imported products that are re-exported through the bonded warehouse and free trade zone system. Finally, Miti promised to implement stricter standards for the license approval of scrap steel processing plants, and only allow consumers to import scrap, not traders. In addition, Miti stated that the measures implemented in 2021 may be considered for inclusion in Malaysia's new industrial master plan for 2021-2030.

Restricting the export of scrap steel is also an important focus of recent local steel mills. As China currently allows the import of scrap steel, the Asian scrap market is expected to become more tight. If Malaysia plans to increase its steelmaking capacity, it will still rely on scrap imports. Retaining domestic steel scrap for local use may alleviate the impact of local consumers in the aggressive international market to a certain extent.