The Malaysian government is taking new steps to address the rapidly growing overcapacity of iron and steel production in Southeast Asia. Deputy Minister of Investment, Trade and Industry Liew Chin Tong announced that an independent committee has been appointed to provide strategic recommendations for the future of the industry.
In 2021, Southeast Asia’s total steel production capacity was 75 million metric tons per year. However, if all approved and planned projects in the region are commissioned, this capacity is expected to reach 150 million metric tons by 2027. This rapid growth in the region is causing serious concerns, especially considering the economic slowdown in the construction and real estate sectors in China.
Malaysia has taken several protective measures to mitigate the negative impact of overcapacity on the local industry. Between 2015 and 2023, nine anti-dumping measures and three safeguard measures were implemented against imported products. These measures focused particularly on steel, plastics, and construction materials from China. Anti-dumping investigations are also ongoing on four steel and plastic products that are considered to be affected by China's surplus production.
Liew said that the report to be prepared by the independent committee will provide a roadmap for creating a sustainable structure in Malaysia’s iron and steel sectors. The government will also consider additional measures to reduce the influence of large Chinese steel producers operating in the country.
The impact of overcapacity in the region and China's economic challenges on the local steel industry underscores the importance of a balanced approach. In this context, Malaysia aims to develop solutions that comply with international trade agreements while protecting local producers.
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