Malaysia Steel Association backs crackdown on scrap export duty evasion

• MITI urges to tighten compliance under NIMP 2030 framework
• Illicit scrap exports cost MYR 160 mn/year in lost revenue

The Malaysia Steel Association (MSA) has strongly endorsed the Malaysian Anti-Corruption Commission’s (MACC) nationwide operation, Ops Metal, which targets the evasion of the 15% export duty on steel scrap.

Initiated in July with raids across 19 locations, the operation is seen by MSA as a critical move to uphold market integrity, ensure equitable trade practices, and protect the sustainability of domestic supply chains.

According to MACC, illicit scrap export practices have resulted in tax leakages exceeding MYR 950 million ($223.6 million) over the past six years–an average annual loss of MYR 160 million ($37.7 million)–undermining national fiscal stability and eroding market confidence.

The MSA also commended the Ministry of Investment, Trade and Industry (MITI) for its prompt response to instances of duty circumvention.

The association emphasised the strategic relevance of the steel industry, which contributes 2.5% to Malaysia’s GDP. With steel scrap being a critical raw material for low-carbon steelmaking, the association warned that illicit outflows are causing domestic shortages, raising input costs, and disrupting local manufacturing output.

Noteworthily, Malaysia remains a nominal but consistent supplier of steel scrap–particularly Busheling, Shredded PNS, and HMS–to key regional markets such as Bangladesh and other SE Asian countries. Unregulated exports not only impair domestic availability but also distort regional trade flows and undermine Malaysia’s industrial decarbonisation ambitions.

Steel scrap is crucial for electric arc furnace (EAF)-based steelmaking, which produces lower emissions than traditional methods. A well-regulated and transparent scrap supply chain is essential for Malaysia to meet its Net Zero 2050 goals and support the New Industrial Master Plan 2030, which highlights basic metals as key to a greener economy.

MSA reaffirmed its support for MACC’s actions and urged joint efforts from enforcement and financial agencies. It also called for clear policies to ensure fair scrap trade, promote circular economy practices, and protect the long-term health of Malaysia’s steel industry.