KUALA LUMPUR: Sarawak-based Asteel Group Bhd sees the United States’ recent move to increase tariffs on imported steel and aluminium to 25% from 10% as an opportunity to expand regional trade within Asean and explore alternative markets.
Group managing director Datuk Seri Victor Hii Lu Thian said since Asean governments are already implementing measures to manage cheap imports, the company believes Malaysia should adopt similar strategies.
He said Asteel, which has partnered with Tokyo-based Marubeni-Itochu Steel Inc, is positioning itself to enhance regional collaborations and expand market reach beyond traditional partners.
“The imposition of a 25% tariff on imported steel and aluminium into the US will likely lead to trade diversion, increasing the influx of steel products into Malaysia. This situation could disrupt the balance in the domestic steel market, affecting export opportunities and intensifying competition from redirected supplies, particularly from China, Korea, Japan, and Vietnam,” Hii told SunBiz.
He said the global shifts in trade flows due to these tariffs could result in price volatility and supply chain instability.
“Countries previously exporting to the US may seek alternative markets, causing fluctuations in supply and demand. Asteel is closely monitoring these developments to mitigate risks and ensure a stable supply chain for our operations and customers,” Hii said.
Reuters recently reported that US President Donald Trump ordered a 25% import tax on all steel and aluminium entering the US, ending previous exemptions for allies including Canada and the European Union and marking a major expansion of trade barriers.
Trump said he was “simplifying” the rules and the measures would boost domestic production.
“This is a big deal, the beginning of making America rich again,” he said in signing the proclamation, which said the measures would come into force on March 12.
Hii said that to mitigate negative effects and capitalise on opportunities, the government should reinforce anti-dumping legislation, expedite investigations and implement protective measures against unfair trade practices.
“Decisive action is necessary to prevent lasting damage to Malaysia’s steel industry, ensuring fair competition and sustainable growth. Asteel urges authorities to step up enforcement against illicit steel imports, as seen in recent seizures by the Customs Department.”
Recently, International Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said Malaysia currently has a moratorium on establishing new steel and aluminium plants and expanding existing facilities due to concerns about potential overcapacity in the country.
He said while recent developments in the US may raise questions, Malaysia is not a significant exporter of steel and aluminium to the US. “Our primary exports to the US are in the electrical and electronics sector, making the impact of any US actions on steel and aluminium exports negligible.”
Asteel chief business development and corporate affairs officer Fong Fui Yee said Malaysia’s steel demand is expected to remain stable despite global economic uncertainties.
He said the rapid growth of data centres would be driven by key sectors, including infrastructure, construction and manufacturing. “Asteel anticipates continued growth in these areas and is committed to supplying high-quality steel products to support national development initiatives.”
Fong noted that Asteel has been involved in significant projects, including the RM61.2 million Elmina Data Centre roof and cladding contract.
“We are continuously exploring new partnerships and projects to solidify our position as a key player in the roofing and walling industry,” he said.
Asked to comment on the government’s implementation of a two-year moratorium on the expansion and diversification of the steelmaking industry that came into effect on Aug 15, 2023, Fong said while the moratorium on steel industry expansion may help regulate supply, Asteel believes it is crucial to strike a balance between industry control and business growth.
“We remain focused on optimising operations and increasing efficiency to stay competitive. Industry-wide challenges, including unfair competition, further highlight the need for policies that protect local manufacturers and maintain a resilient market environment,” he said.
Fong said Asteel is committed to expanding its footprint in Malaysia.
“Our plans include setting up new branches and roll-forming factories to enhance production capacity and improve service delivery. However, we are also recalibrating our expansion strategies in response to market conditions and the impact of unfair steel imports,“ he added.
Fong noted that Asteel has previously expanded into international markets, including New Zealand.
“Looking ahead, we are evaluating opportunities in regions such as Kalimantan, Indonesia, and the Philippines. Our global expansion strategy focuses on leveraging regional trade agreements, forming strategic alliances, and ensuring sustainable market penetration.
“At the same time, our ability to expand is contingent on addressing domestic challenges, including unfair competition from imported steel products,” he said.
