Ann Joo wants Miti action on China imports

PETALING JAYA: Steelmaker Ann Joo Resources Bhd has joined calls for the government to address oversupply in the market and rampant dumping by players from China with demands for greater trade action, in particular on wire rods and steel bars.
Earlier this month, Lion Group executive chairman Tan Sri William Cheng asked that the government accord blanket protection to the steel industry for the next six years.
Ann Joo group managing director Datuk Lim Hong Thye (pix) said Ann Joo and other industry players plan to file applications for anti-dumping duties to be slapped on imports of wire rods and steel bars from China.
The application for anti-dumping duties on wire rods will be an appeal in line with the annual review of anti-dumping duties on imported wire rods effective Feb 20, 2013, to include two major Chinese exporters which were exempted the first time around, while the application for duties on Chinese steel bars will be a new one following rampant dumping here, Ann Joo said.
"These (duties on wire rods and import licensing of alloy wire rod since Jan 1, 2014) are two positive moves taken by Miti (Ministry of International Trade and Industry) but we're appealing to Miti to seriously look at the effectiveness on the control of wire rods and the influx of steel bars which is becoming a serious problem," Lim told reporters after the group's AGM here yesterday.
According to him the import of steel bars from China has witnessed a surge in import tonnage by over 200% since 2011 and is expected to surge further in the near future.
"As far as Ann Joo is concerned, we're asking for trade remedies and actions, not protection. Let's have a level playing field. We agree with Miti to promote a free and fair trade. We hope there will be more proper action to address the rest of the product because we still see import coming in at high volume in the first three months of this year," said Lim.
He said FY13 was the toughest year for the steel industry, due to the external environment and steelmakers were faced with a huge influx of cheap China products, which is one of the main threats to the industry. The group had to contend with intensified competition on the back of sluggish steel market sentiments.
Lim said compared with 2012, the average price for steel bar and wire rod in Malaysia dropped 6% to 8% last year, which is huge for steel mills.
He said steel price in the domestic market for steel bars and wire rods is currently around RM2,000 per metric tonne due to the influx of cheap China products.
"It's possible (that steel price will fall) if the influx of China products continue. We're feeling the pressure in the past two months. We see the domestic price keep coming down despite the hike in electricity tariff and natural gas tariff. We urge and appeal to government to seriously look into this.
"Ann Joo has invested heavily here (in Malaysia) and we're here to stay but we do appeal to government that while we support the government's policy for a free and fair trade, we also hope the government will take quick action when there are unfair trade practices," Lim said.
On the domestic front, continuous spending on the construction sectors and infrastructure projects, steel demand is expected to remain resilient. The implementation of key projects from construction, oil and gas, shipbuilding and general fabrication sub-sectors remain the backbone for the steel industry that will benefit Ann Joo's manufacturing and trading divisions.
Lim expects revenue contribution to its manufacturing and trading divisions to stand at 70:30 this year, from 60:40 currently.