KUALA LUMPUR (Dec 30): Megasteel Sdn Bhd questioned today, the Malaysian Iron and Steel Industry Federation's (Misif) motive in blocking its safeguard petition for hot rolled coil (HRC) imports.
In a statement, Megasteel reiterated that the Ministry of International Trade and Industry (Miti) has gazetted its petition for safeguard, which is thus deemed to have fulfilled the necessary conditions and requirements, including under the World Trade Organisation (WTO) and therefore, merits consideration.
Misif told a press conference yesterday (Dec 29) that it was prepared to use all means, including legal action, to block Megasteel’s safeguard petition.
“Misif’s threat to take legal action on this matter, only serves to undermine the Malaysian authorities’ jurisdiction, even before any ruling can be made,” Megasteel said in today's statement.
“On this note, Misif’s call to foreign steel players to file their case to WTO against Megasteel’s petition, not only questions Miti’s authority and the ministry’s right to accept and decide on such petitions, but most alarmingly, raises doubts on Misif’s agenda in exhorting foreign steel players to take action against local steelmakers, which can be seen as an act of subversion towards our national interests and financial stability,” it added.
Megasteel also said it reserves the right to take appropriate legal action against relevant parties, should its interests be jeopardised.
On Misif’s allegation that Megasteel’s petition has no merit, the latter stressed it has the right to seek trade remedy measures, such as anti-dumping and safeguard duties against HRC imports, which are causing serious injury to the local steel industry.
“Many countries have adopted safeguard measures against steel imports, but we have not witnessed any trade wars erupting between countries, as a result of those safeguard measures,” said Megasteel.
“Such scaremongering of trade wars and retaliation measures by Misif is highly regrettable,” it added.
Megasteel also claimed that Misif’s objectives to promote cooperation within local steel industry have been hijacked by ‘a few parties’ with different agenda, ‘whose views are not an accurate reflection of the needs of the local steel industry’.
“For the record, Misif’s members themselves have also filed trade remedy petitions; one example being FIW Steel Sdn Bhd's petition against imports of Pre-painted, Painted, Colour Coated Steel Coils from China and Vietnam, with Miti having agreed to impose provisional duties of 52.1% against such imports from China, and 5.68% to 16.45% against Vietnam,” Megasteel said.
Miti had in 2013, lifted the import duty exemption of the 18 grades of HRCs which Megasteel is capable of producing.
In other words, whoever intends to import HRCs that Megasteel is producing, will have to pay a 15% import duty, unless Megasteel is not able to deliver these products to its customers.
Despite the allegations by Misif and its call to the government to reject the safeguard measure, Megasteel said several of Misif’s downstream members are in support of the petition.
“The safeguard measure will reduce the excessive importation of HRC and help to save our foreign exchange and reduce the current deficit,” Megasteel said.
The company further explained that the existence of a strong upstream in iron and steelmaking, helps to promote and develop the mid and downstream industries, and contributes to the creation of indigenous capability and manufacturing skills.
On Misif’s contention that Megasteel’s HRC prices are higher than the world average prices, the latter did not deny the allegation.
“We wish to clarify that our prices are guided by the price mechanism sanctioned by Miti, and we have never sold above the price allowed under the mechanism,” Megasteel said, adding that the sale of HRC to the electronics, white goods and automotive sectors is minimal and therefore, will not cause the escalation of inflation, as alleged by Misif.