Malaysia fights against export duty evasion on scrap

The Malaysian Anti-Corruption Commission (MACC) is conducting a nationwide operation called “Ops Metal” aimed at combating evasion of the 15% export duty on steel scrap. This was reported by BigMint.

The operation, which began in July, has received support from the Malaysian Steel Association (MSA). The association considers it a critical step in maintaining market integrity, ensuring fair trade practices, and protecting the sustainability of domestic supply chains.

The association emphasized the strategic importance of the steel industry, which accounts for 2.5% of the country’s GDP. The MSA noted that scrap is a critical raw material for the production of low-carbon steel, and its illegal outflow leads to domestic shortages, increases in raw material costs, and affects local production volumes.

The association also called for a clear policy to ensure fair trade in scrap, promote a closed economy, and protect the Malaysian steel industry.

According to the MACC, illegal scrap exports have resulted in tax revenue losses of more than 950 million Malaysian ringgit ($223.6 million) over the past six years.

Malaysia, BigMint notes, remains a nominal but stable supplier of scrap to key regional markets such as Bangladesh and other Southeast Asian countries. Uncontrolled exports also distort regional trade flows and undermine the country’s decarbonization ambitions.

As a reminder, Indian authorities recently launched a large-scale audit of scrap dealers for evading goods and services tax (GST). The relevant government agency has deployed inspection teams to various locations to check documentation, actual balances, and transport documents.

As GMK Center reported earlier, the ferrous scrap market in Poland is showing steady export growth amid the transformation of logistics chains and changes in the geography of supplies (2.8 million tons in 2024). This indicates an increase in foreign trade, primarily due to increased supplies to Turkey. There has also been a parallel increase in scrap imports to Poland from Ukraine, indicating the formation of the former’s transit role in the European raw materials supply chain. However, the EU is already discussing restrictions on the export of secondary raw materials outside the bloc.

Currently, 77% of the world’s steel is produced in countries that have already introduced or plan to introduce restrictions on scrap exports. In May of this year, the Ministry of Economy of Ukraine submitted for public discussion a draft resolution of the Cabinet of Ministers proposing to introduce licensing and quotas for the export of ferrous scrap with a zero quota for 2025.