Journey to Wealth
Steel Sector - Renewed calls for regulation over steel imports OVERWEIGHT
- The Star reports today that the Malaysian Iron and SteelFederation (MISIF) and Malaysia Steel Association (MSA) have joined ranks toseek the federal government's intervention in providing a mechanism to regulatethe level of steel imports in Malaysia.
- Among others, both MISIF and MSA are appealing to thegovernment to strengthen its policies in following areas:-
- Policies governingsteel imports for re-exporting purposes;
- The licensedmanufacturing warehouse status; and
- Zero import duty offoreign finished products and steel grades not locally produced inMalaysia.
- To this effect, both parties are pushing for the formationof a Malaysia Steel Institute, which is supposed to act as an independent bodythat will give recommendations to the Malaysia International Trade and IndustryMinistry (MITI).
- An immediate area of concern is the influx of cheaperimports of 'boron-added' steel products. Essentially, this has caused manylocally-manufactured finished steel products still unable to compete againstsimilar imported finished steel products, which have a zero import duty.
- Under Malaysia's national steel policy, only manufacturersare eligible to apply for duty exemption. While Malaysia has yet to impose anyform of anti-dumping duties to circumvent this problem, some of its ASEANneighbours such as Thailand have resorted to imposing an anti-dumping duty of19% under non-tariff barriers on such steel imports from China.
- We reckon that the situation is more pronounced,especially when stacked up against cheap imports especially from China, whichcome under the guise of boron-added steel products under alloy tariff codes,for which such items are duty-free when brought in by traders andstockists.
- To be sure, The Star report quoted the Lion Group assaying that its unit Megasteel has been overwhelmed by imports of bothhot-rolled coils (HRC) and cold-rolled coils (CRC).
- As such, we prefer the long-steel players where the threatof cheap imports are less pronounced, while domestic steel consumption shouldsee a pick-up in demand with the select roll-out of infrastructure products(e.g. Klang Valley MRT) under the government's ETP programme. Our top picks areAnn Joo Resources and Lion Industries
Source: OSK188
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
