C26-2020: Updated Iron and Steel Policy from MITI

Updated Iron and Steel Policy from MITI

MITI informed that they had presented the revised iron and steel policy to the Cabinet on 13 November 2020 for deliberation and it was agreed by the Cabinet. The details of the revisions are stated as below for member’s reference.

  • issuance of new Manufacturing License (ML) will be subjected to tightened conditions taking into consideration the impact to existing industry stakeholders, particularly for like products segment;

(ii)        current import duty structure including for long and flat products ranging from 5-15% is extended until 31 December 2021;

(iii)       introduction of 15% export duty on ferrous scrap with Export License mechanism for monitoring purposes;

(iv)       options for import duty exemption application via Jawatankuasa Pengecualian Cukai (JPC3) or duty drawback facility for export purposes through Licensed Manufacturing Warehouse (LMW) and Free Zone (FZ);

(v)       issuance of Manufacturing License and exemption from ML (ICA10) for scrap metal recycling activities will be considered based on merit of the project and its spillover effects to existing domestic supply chain; and

(vi)       for importation of metal scrap:

(a)   existing ML holders undertaking recycling activities are allowed to import metal scrap for HS Code 7204 (iron & steel), 7404 (copper) and 7602 (aluminium) subject to approval by SIRIM under Perintah Larangan Kastam. Its process will be outlined in an updated metal scrap importation Guidelines issued by Department of Environment (DOE).

(b)   Traders are not allowed to import metal scrap. Consideration will be given to allow import of scraps directly via trading arm/third party based on verified invoice from steel mills for steel making activities and from existing recyclers for recovery activities.

In the circulated letter, MITI informed that the Government has also agreed about the updated iron and steel policy will remain in force until 31 December 2021. Any revision or extension will be subjected to the overarching policy direction under the New Industrial Master Plan 2021-2030.

The respective Ministries and Agencies will be issuing the technical requirements, including the effective date of the measures. These details are due to be announced by the first quarter of 2021.

MITI assured that the Government is committed to working with all segments of the domestic steel industry to ensure it remains relevant and sustainable in the long run. The updated policy measures are expected to accord some relief to the iron and steel sector and assist business recovery, particularly against the current global economic developments.

MISIF thanks members who supported and contributed their effort in the making of the White Paper.