Anti-dumping duties in place, but loopholes remain
KUCHING: Analysts are less than convinced of the government’s ability to fully safeguard the local steel sector from dumping by foreign players.
The Ministry of International Trade and Industry (MITI) recently formalised antidumping duties from December 2019 to December 2024 of 3.84 to 26.39 per cent on iron or nonalloy steel-based cold-rolled coils (CRC) with a width of more than 1,300mm from China, Japan, South Korea and Vietnam.
This represents an extension to provisional safeguard duties of 26.39 per cent imposed from August 2019 to curb the influx of underpriced CRC in the local market.
However, the team at AmInvestment Bank Bhd (AmInvestment Bank) did not believe the latest development could resolve the long-standing issue of dumping by foreign players.
“They could still possibly bypass the duties by changing the physical properties to an “alloy” (which does not attract anti-dumping duties) by adding an element (for instance, boron) to the CRC without changing the metallurgical properties,” it highlighted in a research note yesterday.
“We understand that imports have continued to dominate the local CRC market with an estimated market share of 60 to 70 per cent.
“We remain cautious on the prospects of the local flat steel sector amidst steep competition from cheap imports in the market.”
While anti-dumping duties have now been put in place by government to protect the local players, AmInvestment Bank said they may not completely eliminate the loopholes.
“With cheap imports still flooding the local market, we believe the local flat steel producers will have no choice but to defend their market shares at the expense of margins.”