Steel makers seek ban on export of scrap metal

The Philippine Steelmakers Association (PSA) is asking the Department of Trade and Industry (DTI) to impose a ban on the export of scrap metal to protect the country’s local steel manufacturing industry.

"The local steel manufacturing industry is suffering from a worldwide shortage of raw material," said Jeffrey T. Ng, PSA president and owner of Cathay Pacific Steel Corp. (Capasco).

"While local steel manufacturers are still able to source scrap metal locally, they are now faced with increased competition from foreign buyers," Ng said.

Korea and Taiwan are the country’s bigger foreign buyers of scrap metals.

"Foreign buyers are able to offer higher prices for local scrap metal, prompting local junk dealers to export and sell to foreign buyers," Ng said.

Ng argued that local steel manufacturers are at a disadvantage against foreign scrap metal buyers "because their (foreign steel industries) are heavily protected by their respective governments."

"The Philippine steel industry, on the other hand, is left wide open to foreign competition," Ng lamented.

Meanwhile, local scrap metal dealers are opposing an export ban on scrap metal.

They claim that local steel manufacturers led by Capasco merely wants to impose a monopolistic pricing policy on scrap metal.

Local steel manufacturers have been trying to get local scrap dealers to sign an agreement wherein local scrap dealers will have to sell up to 800,000 metric tons annually to local scrap buyers at P3.80 to P4.80 per kilogram.

The local selling price is P1 to P2 lower than the export price of between P5 to P6 per kilo.