Steel Wire Association of Malaysia to challenge safeguard duty in court
Edge Financial Daily reported that Steel Wire Association of Malaysia has obtained leave to pursue a court challenge against safeguard duties imposed by the international trade and industry ministry (Miti) on imported steel wire rods and deformed bar in coils. People familiar with the matter told The Edge Financial Daily that granted by the Kuala Lumpur High Court last week, the leave paves the way for the association to seek a court order to quash the safeguard duty.
The judicial review is only for the safeguard duties for SWR and DBIC, which was announced on April 13. The proceedings do not involve safeguard duties on imported steel concrete reinforcing bar (rebar) which was also announced on the same day.
It is learnt that the proceedings involve SWAM and Miti. The Malaysian Steel Association (MSA), whose petitions last year initiated the safeguard investigations that culminated in the safeguard duties, had applied to be part of the proceedings.
Rebar is mainly used for construction activities in Malaysia whereas SWR and DBIC are used by downstream steel manufacturers many of whom are SWAM members to produce steel wire mesh, fending and fasteners such as nuts, bolts and nails.
The duties for SWR and DBIC begin at 13.9% for the year up to April 14, 2018, then 12.9% and 11.9% respectively for the subsequent two years. Meanwhile for rebar, imports are slapped with a 13.42% import duty for 12 months up to April 13, 2018, followed by 12.27% and 11.1% each for the subsequent two years.
To recap, Miti had imposed the two duties after concluding two parallel safeguard investigations, which it initiated following safeguard petitions by the MSA in June 2016.
During the three-year period of safeguard duties, the petitioners would have to implement the individual adjustment plans submitted alongside their petitions. While plans vary, the steel mills had generally aimed to boost efficiency and productivity by improving processes and investing in plant upgrades and modifications, among others.
The MSA petitioners are Ann Joo Steel Bhd, Southern Steel Bhd, Malaysia Steel Works (KL) Bhd as well as Lion Industries Corp Bhd’s subsidiaries Amsteel Mills Sdn Bhd and Antara Steel Mills Sdn Bhd.
They had claimed that the domestic producers of rebar, SWR and DBIC were substantially hurt by surging imports between Oct 1, 2012, and Sept 30, 2015, which caused them to lose market share, downsize workforce and scale back operations.
Collectively, the participating steel mills account for 73.4% of local rebar output and 100% of local SWR and DBIC production.
The petitions were strongly objected to by various steel industry players who use the three steel products as raw materials because the additional duties would increase their procurement costs, hurting profit margins.
Source : Edge Financial Daily