Chinese steelmakers ask government to stop illegal deals

Local steelworkers from China are seeking help from the government to impose strict regulations on illegal steel trading practices in the country. Some steelmakers illegally exploit the loopholes in the Chinese tax structure.

They took advantage of an export discount of 9-13 percent by declaring their products to be exports of alloys instead of steel. The bulk of China's steel wire rod exported to Malaysia contains only 0.0008 percent alloy steel and is referred to as an alloy, said Metallurgical Federation President Thian Lai.

He added that high quality alloy steel products are exported to Malaysia at a price much lower than in 2009. However, this export cannot be a real high quality steel alloy product.

In 2013, Malaysia imported about 302,000 tons of Chinese steel bars and about 630,000 tons of section steel from China. In addition, China exported about 1,830,000 tons of steel products to Malaysia, mostly long products last year.
Lim said that while Malaysia imposed a 25 percent import duty on steel from

Taiwan, China, Indonesia and South Korea, some steelmakers have been able to bypass the trading system. The Malaysian representative added that they will encourage the import of good and genuine steel bars for the automotive and construction sectors as they are unable to manufacture these products.

To reduce these illegal trading practices, local steel producers joined the Ministry of Foreign Trade and Industry (Miti) in an appeal to the government to enact strict trade rules by the end of the month.