Malaysia's Steel Shake-Up: Why South Korea and Vietnam are Smiling While China and Japan Grind Their Teeth

The steel sector in Southeast Asia is undergoing a seismic shift. Malaysia's recent decision to slash anti-dumping duties on Vietnamese and South Korean steel exports—while keeping the screws on China and Japan—could redefine regional trade dynamics. This isn't just about tariffs; it's a goldmine for investors who spot the winners and losers fast enough. Let's break down the opportunities and risks in this metals melee.

The Rules of Engagement
Malaysia's move isn't arbitrary. After a 2024 anti-dumping probe targeting tin-plated steel imports, the country finalized a five-year duty regime in May 2025. Here's the key twist:
- South Korea and Vietnam: Duties on their cold-rolled coil (CRC) steel exports were scrapped entirely on June 23, 2025.
- China and Japan: Stuck with tariffs ranging from 4.76% to 26.39%, depending on the product.

This creates a stark divide: Vietnamese and South Korean exporters now have a price edge in Malaysia, while Chinese and Japanese firms face higher costs. The implications? Market share shifts, pricing wars, and a clear roadmap for investors.

The Winners: Vietnam and South Korea Steal the Spotlight

1. Vietnam's Steel Surge
Vietnamese steel producers like Hoa Phat Group (HPG.HM) and Pomina Steel Corporation (POM) could see Malaysian exports soar. With zero tariffs, their prices suddenly undercut Chinese rivals by up to 26%.

Investors should eye Vietnamese steel ETFs like the iShares MSCI Vietnam ETF (VNM) or directly target firms like HPG, which already supplies 49,000 metric tons to Malaysia—now free to expand aggressively.

2. South Korea's Quiet Dominance
South Korea's POSCO (PKX) and Hyundai Steel (005490.KS) were already top-tier players but now gain a tariff-free runway. Malaysia's CRC market—critical for construction and automotive sectors—could become a Korean stronghold.

The Losers: China and Japan's Steel Blues

1. China's Margins Under Pressure
Beijing's exporters, like Baowu Steel (0307.HK), face a dilemma: accept lower profit margins or lose Malaysian market share. The 4.76%-26.39% duties mean their products are now pricier than rivals'.

2. Japan's Stiff Tariff Stumble
Japan's Nippon Steel (5401.T) and JFE Holdings (5411.T) are stuck with a 26.39% duty wall. Their Malaysian sales could shrink unless they reprice—a tough ask in a cost-conscious market.

The Big Picture: Regional Steel Pricing and ETF Plays

The tariff shift will depress regional steel prices, as cheaper Vietnamese/S.Korean supply floods Malaysia. This benefits buyers (think construction firms) but hurts producers with higher costs.

For investors, here's the action plan:
1. Buy into Vietnam/S.Korea steel stocks or ETFs like the iShares MSCI South Korea ETF (EWY) or materials ETFs (e.g., XLB) with exposure to the region.
2. Short Chinese steel giants if their Malaysian sales crater—though note that China's broader export markets (like the U.S.) remain key.
3. Watch for retaliation—if Beijing or Tokyo push back with their own duties, volatility could spike.

Final Cramer-Style Takeaway

Malaysia's decision isn't just a trade tweak—it's a sectoral reset. Investors who bet on Vietnam and South Korea now could pocket gains as their steel firms grab market share. But tread carefully: China and Japan aren't going down without a fight.

Bottom line: Load up on Vietnamese/S.Korean steel plays, but keep one eye on the horizon—trade wars are never over.

Stay hungry, stay focused—and never underestimate the power of a tariff.