Increased tariffs designed to protect the U.S. steel industry are starting to have international repercussions in unexpected places with Malaysia launching an anti-dumping investigation into steel imported from Turkey, a country hit hard by the changed U.S. import rules.
What’s upset Malaysia’s steel industry is a flood of cheap steel from Turkey that used to find a market in the U.S. leading to a request from the Malaysian Steel Association for a government investigation into whether steel from Turkey and Singapore is being dumped at a price lower than the domestic price in the exporting countries.
It will take time for the dumping inquiry to establish the facts but a few days before the Malaysian request to examine the flow of steel products out of Turkey an investment bank report identified part of the problem being a worldwide surplus of scrap steel.
Scrap Steel Surplus
Turkey is the world’s biggest importer of scrap used in electric-arc furnaces to make exportable products such as reinforcing bar (rebar) used in construction projects.
Steel reinforcing bars. Photographer: Vladimir Weiss/Bloomberg BLOOMBERG NEWS
One of the biggest markets for Turkish steel has been the U.S. but with the higher tariffs it’s been necessary for Turkish steel mills to find new markets.
The end result is a curious case of what can happen when a fundamental change is made to the way an industry functions with the root cause of the problem confronting Malaysia’s steel industry being surplus Turkish steel, which is being blamed on the increased U.S. tariffs.
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