ASEAN steel group concerned about Chinese overcapacity

A steelmaking association representing producers in Malaysia and neighboring ASEAN (Association of Southeast Asian Nations) countries has indicated steel imports and what it considers unfair trade practices are undermining profitable steelmaking in the region.

The Malaysia-based South East Asia Iron and Steel Institute (SEAISI) has been portrayed in an online article by India-based Business Today as seeking action from Malaysia’s Ministry of Investment, Trade and Industry (MITI) and its Independent Steel Committee.

According to the publication, SEAISI submitted a report on the topic to MITI “regarding growing Chinese steelmaking capacity in Malaysia and neighboring countries.” 

Governments around the world have been adopting strategies to help their steel industries combat “surging” imports, including tariffs in the United States and with SEAISI citing the United Kingdom and its emergency intervention to take control of the Chinese-owned British Steel plant.

The Malaysian Iron & Steel Industry Federation (MISIF), according to SEAISI and Business Today, is calling on the government of Malaysia to take “immediate, bold and decisive action.”

“Coordinated intervention is urgently needed to prevent long-term damage to the industry and safeguard national production capabilities,” the Indian publication quotes SEAISI as saying.

Chronic overcapacity remains one of the most critical structural issues facing steelmakers, according to SEAISI, adding that long-term solutions are needed.

According to Business Today, SEAISI fears “systematic risk to the stock market and banking sector,” saying it is “of utmost priority and urgency to resolve the overcapacity issue by providing protection to the Malaysia steel industry.”

In neighboring Singapore, the NatSteel recycled-content electric arc furnace (EAF) melt shop, which is owned by China-based Zenith Steel, was idled last month. According to a source contacted by Recycling Today, the melt shop could be idle for a full year while in the interim Zenith Steel imports steel rebar made in the People’s Republic of China.