Malaysia's steel industry faces rising cost pressures

The Malaysian Iron and Steel Industry Federation (Misif) said cost pressures on the local steel industry threaten sustainability due to recent economic policy changes and increased imports of low-cost steel. Misif President Roshan M Abdullah said the industry faces new regulations such as a carbon tax that will come into effect in 2026, increased minimum wages, a multi-tier levy, and mandatory EPF contributions for foreign workers. These measures, introduced under Budget 2025 to support national goals, are increasing operational costs for local steel manufacturers, squeezing profit margins, and undermining competitiveness. 

In addition to internal pressures, Malaysian steelmakers are struggling to compete against low-priced imports, often produced under more favorable regulatory conditions abroad, which undercut local market prices. Misif has called on the government to support the sector by addressing these combined challenges to ensure the industry’s sustainability.

Deputy Investment, Trade, and Industry Minister Liew Chin Tong stated that Malaysia’s carbon tax might extend to steel imports, fostering a level playing field. Such a tax would help offset local manufacturers' costs and contribute to a green transition fund. Liew emphasized that taxing both local and imported steel is essential for ensuring fair competition and supporting Malaysia’s environmental goals.