PETALING JAYA: The local steel industry wants the Government to be decisive in imposing temporary anti-dumping measures on the cheaper imported steel goods currently flooding the country while the final investigation on certain products for anti-dumping cases is in progress.

Malaysian Iron and Steel Industry Federation (Misif) president Datuk Soh Thian Lai said the national policy and regulatory controls on the steel sector in the past was heavily regulated especially in terms of import controls.

“The challenge now is to correctly balance between the opening up of the market quickly versus ensuring effective supplies of critical materials while ensuring the viability of the industry,” he told reporters at Misif 10th Conference on the Status and Outlook of the Malaysian Iron and Steel Industry officiated by Miti deputy minister Datuk Jacob Dungau Sagan yesterday.

According to Soh, the influx of imported steel goods into Malaysia especially with the falling of the global steel prices in the past months would continue to put pressure on local steel producers' operating margins in the second half this year and first half of next year.

The current capacity utilisation among the players was low, he said, adding that “capacity utilisation need to be above 60% especially formid and downstream steel players to enable them to reduce their unitcosts and produce a wider range of products.”

For further survival of the sector and improvement on its competitiveness, Misif is also proposing for local steel players to pursue merger and acquisitions (M&As) among themselves as “the current industry is very fragmented with too many players around,” said Soh.

He added that steel companies should also pursue joint ventures with international steel players to accomplish the same end goal.

Soh pointed out that policies surrounding the local steel sector should take into account its vulnerability in the “boom and bust” cycle and the sensitivities and impact from the global developments.

“The anticipated mid term review of the Third Industrial Master Plan to be accomplished via the newly set up Malaysia Steel Council (MSC) must therefore focused on the entire steel industry value chain to enable all steel players have equal opportunities to compete and be profitable,” he added.

Soh noted that other challenges facing the local industry includedsourcing of materials, free trade agreements (FTAs), growing capacities in Asean countries and Afta, China and implementation of recommendations by Boston Consulting Group commissioned by Miti recently to undertake a study on the competitiveness of the local steel sector.

On China, he said the country has changed into a significant exporter via a massive steel investment programme from a significant importer of steel.

He warned that China threathens to exacerbate the situation further given their reaction to the current financial crisis included initiating several programmes for new steel mills.

Meanwhile, MITI deputy minister Jacob Dungau Sagan said the newly set up MSC under MITI expects to announce at least one or two new solid measures before year end for improvement and address local steel players concern on their competitiveness level given the influx of imported steel goods into the country.

He said MSC would be the local steel industry's apex organization and will be responsible for implementing the development roadmap that will be finalised soon.

MSC is chaired by MITI Minister and include representatives from both the public and private sectors.

Jacob said the roles in MSC would be further clarified and key players would be able to focus on developing products and expanding access into global markets.