Indonesia, Malaysia Promote Protectionism on Steel Import

Indonesian and Malaysian governments plan severer steel import restriction. Indonesian government decided antidumping investigation on cold rolled flat steel from 5 countries including Japan. Malaysian government studies potential safeguard on hot rolled flat steel import. Indonesian and Malaysian governments apparently try to block aggressive import from China and South Korea when Indonesian and Malaysian steel import increases under steady economy growth. Japanese Ministry of Economy, Trade and Industry and Japan Iron and Steel Federation seek smooth import condition citing negative impact on Indonesian and Malaysian steel users.

Indonesia announced on June 24 antidumping investigations on cold rolled steel sheet import from Japan, South Korea, China, Taiwan and Vietnam. Indonesian authorities already implemented protectionism trade actions including technical regulation on steel import with Indonesian standard and cargo check before shipping. Japanese government and steel industry has tried to seek exemption on high grade steel products with no production in Indonesia for specific steel users including automakers and appliances makers.

Malaysia launched preliminary investigation for safeguards on hot rolled sheet import on May 1. Local steel users resist to the regulation and METI and Japan Iron and Steel Federation also opposed to the attempt when such action prevents smooth trade.

Japanese steel export increased by 870,000 tonnes to 1.79 million tonnes for Indonesia in 2010 from 2009. The export increased by 380,000 tonnes to 1.33 million tonnes for Malaysia. The export significantly increased in 2010 from 2009 with lower demand after global recession. Chinese raw steel output stays high to renew annual record and the export is also increasing. Steel makers in South Korea and Taiwan are increasing capacity of upper stream operation while Vietnamese steel makers are increasing cold rolling capacity. These makers try to increase the export to Indonesia and Malaysia with higher industrial activity.