China's Steel Companies Enters Malaysia, Targeting ASEAN Market

As representative of Taipei Economic and Cultural Office in Malaysia pointed out, Guangxi Beibu Gulf International Port Group, Ltd will invest MYR 3.5 billion (USD 970 million) through Alliance steel company to build Malaysia's largest comprehensive steel plant located in Kuantan Industrial Park (Pahang State). The new plant will mainly produce high carbon steel and H-beams with an annual capacity reaching 3.5 million tons. Although this causes concerns over excessive steel supply in Malaysia, Alliance steel company is certain about ASEAN's annual steel consumption of up to 40-50 million tons, judging from Malaysia's comparatively smaller steel market demand.

Additionally, Alliance steel company's entry directly affects Malaysian upstream steel makers like Ann Joo Steel Berhad, ZHUMADIAN Southern Steel-Making Plant Co. Ltd., and The Lions Group. Previously,  China's low-priced steel products were substantially dumped into Malaysia and caused Perwaja Steel Sdn Bhd to shut down a plant in Terengganu State. Downstream steel makers and end-users on the other hand  will continue to benefit from cheaper steel price resulted from excessive steel supply.