Malaysia has proposed an amendment to its customs duties to impose a 15pc duty on exports of ferrous scrap, effective March 25, according to official documents.

 

Domestic steelmakers are dependent on imported scrap amid insufficient local supply, partly due to scrap exports. Malaysian yards prefer to export scrap for better realization. The country has a significant number of EAF-based steelmaking plants, which need a constant inflow of scrap.

 

From Thursday, ferrous scrap export with HS codes 7204.10.0000, 7204.29.0000, 7204.30.0000, 7204.41.0000 and 7204.49.0000 will be subject to 15pc export duties. Through this duty, the government aims to restrict ferrous scrap exports and secure material for domestic producers. This could lower the country’s dependency on imports, but Malaysia will continue to be a net importer of scrap.  

 

Out of the total requirement of 2-2.5mn mt scrap, only 30pc is fulfilled by domestic suppliers. According to customs statistics, Malaysia exported 454,798mt of ferrous scrap in 2020, up 14pc from the previous year. While imports recorded a drop of 8.9pc to 1.40mn mt in 2020.

 

In 2016, an export tax of 10pc on ferrous scrap was lifted leading to successive increases in exports. As per customs data, India was the largest importer of Malaysian scrap in 2020 at 173,053 mt, followed by Indonesia 99, 696 mt and Singapore 69,203 mt.

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