Malaysia's Steel Export Market Overview

Malaysia's iron and steel industry has shaped the country's industrial development since 1957. In 2023, the sector exported goods valued at RM30.4 billion, predominantly basic-grade steel, across a total volume of 8.2 million tonnes. The basic metals industry employs 112,157 people — 4.7% of total manufacturing employment — and contributes 2.5% of GDP, while iron and steel exports account for 2.4% of Malaysia's total manufactured goods exports.

At the same time, Malaysia imported 7.3 million tonnes of iron and steel products in 2023, of which 27.9% (2.04 million tonnes) came from China alone. As a result, Malaysia sits in an unusual position: simultaneously a meaningful steel exporter and a market increasingly exposed to oversupplied Chinese product.

Where Malaysia's Steel Exports Go

Malaysia's steel export base is spread across a handful of key markets rather than concentrated in any single destination. In 2023, Turkey was the largest buyer by volume, followed closely by Hong Kong and Singapore, with the United States a smaller but strategically important market.

The Squeeze: US Tariffs Out, Chinese Oversupply In

What makes Malaysia's current steel position unusual is that trade pressure is coming from both directions simultaneously. The chart below lays out the two sides of that squeeze.

1. Outbound: US Section 232 Tariffs at 50%

Since June 2025, the United States has applied a 50% Section 232 national-security tariff to steel mill products, including flat-rolled goods under HS 7208. This rate is not country-specific — with the exception of the United Kingdom, which retains a 25% rate under a bilateral arrangement, all other exporting countries, Malaysia included, face the full 50% rate. As of 2026, the US further restructured Section 232 to distinguish between products "wholly of steel" (still 50%) and steel derivative products (reduced to 25%) — raw flat-rolled steel under HS 7208 falls into the higher, 50% tier.

2. Inbound: China's Redirected Oversupply

Meanwhile, Malaysia's domestic steel producers face a separate but related pressure. As tariff walls have gone up in markets like the US, EU, and India, a larger share of China's steel output has been redirected toward Southeast Asia. China's steel exports to ASEAN rose roughly 32% year-on-year in one recent quarter, reaching 36.55 million tonnes — about 70% of China's total exports in that period. Consequently, Malaysia's own steel imports surged 22% in the first quarter of 2025, pushing domestic capacity utilisation down to 65%, well below the 80% level generally considered healthy for the industry.

3. Malaysia's Response: Its Own Anti-Dumping Duties

In response, Malaysia's Ministry of Investment, Trade and Industry (MITI) has moved on multiple fronts. Provisional anti-dumping duties ranging from 2.52% to 36.80% now apply to flat-rolled products of iron or non-alloy steel (width over 600mm) from China, India, Japan, and South Korea, effective from January 2025. Separately, MITI opened a parallel investigation into galvanized steel imports from China, South Korea, and Vietnam, and had already imposed duties of up to 9.78% on coated steel from China and South Korea in an earlier case. In addition, MITI imposed a two-year moratorium on new steel-making capacity expansion in August 2023 to manage industry-wide overcapacity.

Prices Under Pressure Too

Beyond tariffs, Malaysia's hot-rolled steel segment has faced a sustained price decline. The average export price for Malaysia's hot-rolled flat steel stood at just $837 per tonne in 2024, down 10.6% from the prior year — and dramatically below the $2,109 per tonne peak recorded back in 2013. Average import prices told a similar story, falling to $710 per tonne in 2024. This price erosion reflects a broader global oversupply dynamic: China alone accounted for roughly 52% of global steel consumption and 55% of global production between 2020 and 2024.

Challenges Facing Malaysia's Steel Sector

The path forward is not straightforward. On the export side, the 50% US tariff makes the American market considerably less attractive relative to Malaysia's established buyers in Turkey, Hong Kong, and Singapore, which together already account for a larger combined volume than the US. On the import side, MITI's anti-dumping duties can only partially offset the scale of China's redirected exports, and utilisation rates below 65% put real strain on domestic producers' economics. Nonetheless, a new flat steel producer beginning production in the second half of 2024 signals continued investment in the sector, and Malaysia's participation in ASEAN Free Trade Area, RCEP, and CPTPP gives it tariff-preferred access to several of its most important existing markets.

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