May – June 2021

NOTICEBOARD

THE STEELBILLETREBARSTEEL WIRE ROD

RM2,846

RM3,044

RM3,160SCRAPIRON ORE

RM2,113

RM869

TRADE PERFORMANCE
Malaysia’s Trade Performance January-May 2021
Malaysia’s Iron and Steel trade value in May 2021 was recorded at RM5.3 billion, increased by 71 percent
compared to RM3.1 billion in May 2020. Trade balance has widened from trade surplus of RM285.2
million in May 2020 to trade deficit of RM758.7 million in May 2021. Malaysia’s export in May 2021
increased by 35 percent to RM2.3 billion from RM1.7 billion in May 2020. Three main export destinationsin May 2021 were seen to China, Korea and Thailand, represent about 39 percent, 12 percent and 11
percent of the total export value in the month respectively. Malaysia’s import in May 2021 increased by
114 percent to RM3.0 billion from RM1.4 billion in May 2020. Top three Malaysia’s import countries in
May 2021 were China, Japan and Korea represent about 21 percent, 16 percent and 12 percent of thetotal import value in the month respectively. From January to May 2021, the trade value of the Iron andSteel products stood at RM23.8 billion in 2021 compared to RM20.0 billion in the same period of 2020,
expanded by 19 percent. Trade balance has widened from trade deficit of RM589.7 million in January to
May 2020 to trade deficit of RM1.9 billion during the same period of 2021.

Malaysia Trade Performance of Iron & Steel Industry
Month Trade ValueMay 2021: RM5.3billion
71.0 % M-o-M change

May 2020: RM3.1billion

Month Balance of Trade
May 2021: (RM758.7million)
Trade Deficit

366.0 % M-o-M change

May 2020: RM285.2 million
Trade Surplus
Month Export
May 2021: RM2.3billion
35.0 % M-o-M change

May 2020: RM1.7billion

Month Import
May 2021: RM3.0billion
114.0 % M-o-M change
May 2020: RM1.4billion

YTD Trade Value
Jan-May 2021: RM23.8billion
19.0 % Y-o-Y change

Jan-May 2020: RM20.0billion

Jan-May 2021: (RM1.9billion)
Trade Deficit
Jan-May2020:(RM589.7million)
Trade Deficit

YTD Balance of Trade236.0 % Y-o-Y change

May – June 2021

NOTICEBOARD

THE STEELBILLETREBARSTEEL WIRE ROD

RM2,759

RM3,050

RM3,213SCRAP

IRON ORE

RM2,170

RM883

TRADE PERFORMANCE
Malaysia’s Trade Performance January-June 2021
Malaysia’s Iron and Steel trade value in June 2021 was recorded at RM5.1 billion, increased by 22 percent
compared to RM4.1 billion in June 2020. Trade balance has widened from trade deficit of RM344.9 million inJune 2020 to trade deficit of RM1.1 billion in June 2021. Malaysia’s export in June 2021 increased by 3.9
percent to RM2.0 billion from RM1.9 billion in June 2020. Three main export destinations in June 2021 wereseen to China, Thailand and Singapore, represent about 45 percent, 9 percent and 4 percent of the totalexport value in the month respectively. Malaysia’s import in June 2021 increased by 38 percent to RM3.1
billion from RM2.2 billion in June 2020. Top three Malaysia’s import countries in June 2021 were China,
Indonesia and Japan represent about 17 percent, 16 percent and 15 percent of the total import value in themonth respectively. From January to June 2021, the trade value of the Iron and Steel products stood at
RM28.9 billion in 2021 compared to RM24.4 billion in the same period of 2020, expanded by 18 percent.
Trade balance has widened from trade deficit of RM1.2 billion in January to June 2020 to trade deficit of
RM3.1 billion during the same period of 2021.

Malaysia Trade Performance of Iron & Steel Industry
Month Trade Value
June 2021: RM5.1billion
22.0 % M-o-M change

June 2020: RM4.1billion

Month Balance of Trade
June 2021: (RM1.1billion)
Trade Deficit

223.0 % M-o-M change

June 2020: (RM344.9million)
Trade Deficit
Month Export
June 2021: RM2.0billion
3.9 % M-o-M change

June 2020: RM1.9billion

Month Import
June 2021: RM3.1billion

38.0 % M-o-M change

June 2020: RM2.2billion

YTD Trade Value
Jan-June 2021: RM28.9billion
18.0 % Y-o-Y change

Jan-June 2020: RM24.4billion

Jan-June 2021: (RM3.1billion)
Trade Deficit
Jan-June 2020: (RM1.2billion)
Trade Deficit

YTD Balance of Trade
157.0 % Y-o-Y change

MSI BRIDGING GAPSGREENING ASEAN: TOWARDS GREEN RECOVERY IN ASEAN POST-PANDEMIC
On 24th May 2021, the ASEAN Business
Advisory Council and ASEAN Business
Advisory Council Malaysia organized awebinar titled “Greening ASEAN: Towards
Green Recovery in ASEAN PostPandemic”. The webinar aims to address
the current and emerging trends andissues faced by the industry and regional
governments in recovering from the global pandemic. The forum began with a presentation by Hon. Dato Seri
Paduka Dr Haji Abdul Manaf bin Haji Metussin - Deputy Minister of Finance and Economy (bottom right corner),
Brunei to discuss on the economic developments in Brunei. This was followed by a paper presentation by Ms
Jukhee Hong, Executive Director, CARI ASEAN Research and Advocacy (bottom middle) to discuss on ASEAN’s
stimulus packages (fiscal policy responses) in 2020 for the recovery from COVID-19 pandemic. This wasfollowed by a presentation by Ms. Duangjai Asawachintachit - Secretary-General of the Thailand Board of
Investment (BOI) (upper bottom) towards the adoption of green economies in Thailand. Dr. San Oo - Chair of
ASEAN Senior Officials on Environment (ASOEN) – Myanmar Chair (bottom left) discussed on ASEAN at theregional level which includes participation from private sector/NGOs and government sector participation in
Myanmar. Mr. Cedric Rimaud - Corporate Bonds and Green Finance Specialist, Climate Bond Initiative (FundManagement) (Top left) presented on the green market for bonds. Other areas discussed were free trade
agreement (FTAs), the effects of Covid-19 towards green support and an opportunity for green investment.

THE LAUNCHING OF PRODUCTIVITY REPORT 2021 & PRODUCTIVITY FORUM
On 30 June 2021, YB Dato’ Seri Mohamed Azmin Ali officially launched the “Productivity report
2021 & productivity forum” through a virtual session which was attended by MSI. This year’s
report highlighted the snapshots of issues and challenges and the improvement initiatives toenhance national productivity.

MSI TRUMESYUARAT PENYELARASAN PEMETAAN NOSS BAGI TUJUAN PENTAULIAHAN
A meeting on mesyuarat penyelarasan pemetaan noss bagi tujuan pentauliahan was attended by MSI on 16
June 2021 through zoom meeting. The objective of this meeting is to share the mapping process of the existing
NOSS with the programmes under agencies in order to be recognized by JPK.

SEAISI 50 TH ANNIVERSARY E-CONFERENCE & EXHIBITION @ 2021
The South East Asia Iron and Steel Institute (SEAISI) had organized an e-conference from 17 June 2021 until 22
June 2021 with the theme: ASEAN & Regional Markets. Innovative Technologies Post COVID-19. MSI
participated the 4- day programme to gain insight on the steel industry in ASEAN, which has undergone
profound changes in 2020. Due to the Covid-19 pandemic, the demand for steel has dropped by more than
15%. The steel industry in the region needs to learn and adopt to the new normal. The e-conference provided
an insight on the potential importers and exporters of steel, post covid-19 situation in China, India andadvanced countries, trade developments in ASEAN and China. Participants were also briefed on the strategies
and selections for steel products, applications and the best plant management and the supply chain, adoption
on digitalization for technology development and the best technology to provide solution on environmental
and energy sustainability.

STEEL FACTS

WORLD CRUDE STEEL PRODUCTION

Source: https://www.worldsteel.org

EVENTS HIGHLIGHT

STEEL NEWS
1. Choo Bee Metal Q1 Net Profits Soars on Surging Prices
Date: 21 May 2021
Source: https://www.thestar.com.my/business/business-news/2021/05/21/choo-bee-metal-q1-net-profitsoars-on-surging-steel-pricesKUALA LUMPUR: Choo Bee Metal Industries said its net
profit in the first quarter swelled as the shortage of raw
materials pushed up steel prices higher. For the threemonth ended March 31, the company posted a net
profit of RM27.3mil, or 20.9 sen a share compared with
RM3.6mil (2.8 sen a share) made a year ago. Revenue
was up 80% to RM136mil. Global steel prices havesoared as iron ore continued to record protracted
highs.
Choo Bee said further impetus driving steel prices were
attributed to stronger demand led by China, yet steel
supply remains inadequate due to logistics delays (global container shortage) and mill capacity issues
attributed to the Covid-19 pandemic. The company expects local steel prices to remain high "Despite lower
construction activities impacting demand, profit margins have expanded in tandem with the heightened
prices by all manufacturers," Choo Bee said. "The revival of the construction sector and governmental
infrastructure spending (Mass Rapid Transit Line 3 (MRT 3), Klang Valley First Phase Double Tracking Project,etc) remains crucial to drive demand growth for the local steel industry," it added.

2. Steel Steals the Limelight
Date: 22 May 2021
Source: https://www.thestar.com.my/business/business-news/2021/05/22/steel-steals-the-limelight

The recent steep fall in the stock prices of steel-related companies on Bursa Malaysia is likely to be a shortterm correction, as the strength in commodities will be supported by the global economic recovery andacceleration in the re-opening phase in various countries, potentially by the first quarter of 2022, which
will pave way for a return to normalcy in 2023. This was opined by Hong Leong Investment Bank head ofretail research Ng Jun Sheng, who tells StarBizWeek that given the resurgence in the Covid-19 cases
currently, coupled with the slow vaccinations globally, there is ample room for further upside in thecommodity’s price trajectory at least until first-quarter 2022 “but we do see bouts of profit taking ahead
amidst recent unprecedented rally.”
He also notes that near-term seasonal demand weakness and recovering iron ore supply from Vale (theworld’s largest producer of iron ore,pellets and nickel) in the second half
could ease prices.
“In the long term though, steel prices
should be sustainably higher versus thepast few years and be sustainablethrough to 2022 and 2023, as China (thebiggest producer and exporter) aims forcarbon emissions peak by 2025. About
18% of carbon emissions come from ironand steel industries. Transitioning to a
net importer by curbing domestic
production should lend support to steel
prices,” he says.
Ng also points out that a long-term infrastructure boom in the United States, driven by President Joe
Biden’s massive infrastructure bill, if approved, may sustain strong steel prices.
“Low inventories and slow supply response due to logistics disruptions and capacity resumption arecontributing to the struggle of meeting the stronger structural demand globally on the back of China’s
robust demand and the proposed American US$2 trillion (RM8.28 trillion) mega infrastructure plan,” hesays.
Rakuten Trade head of equity sales Vincent Lau also sees the recent steel and aluminium-related stocks’
price drop as a near-term correction, following the news flow from China. “The commodities price boom
has not ended. Investors can buy on the dip. There is a buying opportunity and it is good to cherry pickcompanies with strong earnings,” says Lau.
TA Securities Research analyst Chan Mun Chun agrees, pointing out that steel prices have not weakened
and are still at the RM2,800-per-tonne level in Malaysia.
“What is happening is that steel-related share prices are moving ahead in reaction to perceived negative
news flow,” Chan tells StarBizWeek.Over the past six months, steel-related stocks like CSC Steel Holdings
Bhd, Hiap Teck Venture Bhd, Ann Joo Resources Bhd, Lion Industries Corp Bhd, Mycron Steel Bhd, United
U-Li Corp Bhd and Malaysia Steel Works (KL) Bhd (Masteel) had more than doubled, or even jumped fivetimes from their closing prices on Oct 30,2020.

For example, CSC Steel had closed at RM1.95 on May 4,2021 (from 81.5 sen on Oct 30,2020) while Ann Joo
saw a massive jump to close at RM3.08 on May 10,2021 (from 62 sen on Oct 30,2020).
The same skyrocketing trend was also seen over the same period for the stock prices of aluminium
producers like Press Metal Aluminium Holdings Bhd, LB Aluminium Bhd, PA Resources Bhd and Alcom
Group Bhd.
However, the steel and aluminium-related counters have seen steep drops after the first week of May,
with the steel-related stocks falling 11% to 33% within a two-week period as of end-Thursday.
Ng explains that the Chinese government had recently signaled intentions “to cool off iron ore and steel
prices, and thus negative price action ensued.”“There were stricter checks on price manipulation and collusion in the steel industry. There were also
growing concerns over peaking construction demand in China as we enter the seasonally slow season, andlocal state bonds issued for infrastructure projects are also lower this year versus last year,” he says.
Ng also points out that there was a reported all-time high April crude steel production numbers even withintended 30% to 50% production curbs at Tangshan (15% capacity).
“Overall, CISA (China Iron and Steel Association) is targeting a low single-digit decline in production thisyear. We anticipate stricter curbs to be enforced, given this data release. As a result, on Bursa Malaysia,
the steel-related stocks dropped rapidly due to pent-up selling pressure from reaction to the price action in
China,” he says.
Ng notes that the average selling prices (ASPs) of steel have been increasing and generally, price uptrends
would expand companies’ profitability margins.
He explains that the key drivers of ASPs in China this year were ongoing strong construction demand(seasonally strong), a recovery in industrial manufacturing, high iron ore prices (Vale’s iron ore production
number missed expectations so far), and high coking coal prices.
“There are also long-term environmental goals. Hence, production curbs at Tangshan. Also, indications are
there will be production curbs in Jiangsu also (second-largest steel-making province),” he says.
A recent TA Securities Research report themed “Commodity Plays” opines that the average steel bar pricein Malaysia for the second half of 2021 will be supported at above RM2,400-per-tonne level, backed byexisting demand from construction and property players and less intense price competition in the country.
“Although domestic demand for steel in Malaysia is still relatively soft at this juncture, as the recovery
continues to be disrupted by movement restrictions, many domestic steel players are looking for export
opportunities, especially to
China, in order to offset the weak domestic demand. The steel bar price in China is currently trading at apremium against that in Malaysia,” says the research unit.
In line with the strong rally in global steel prices, domestic flat steel prices have been experiencing a strong
uptrend as well.

TA Securities Research expects flat steel prices in Malaysia to be supported by a gradual demand recovery
from the manufacturing sector and less dumping activity from other countries.
It notes that currently, demand for building materials in Malaysia is mainly supported by ongoing mega
infrastructure projects such as MRT2, LRT3, West Coast Expressway, East Coast Rail Link and Pan Borneo
Highway.
“The government recently revived the MRT3 project, of which we expect contract awards to take place inthe first half of 2022.”
The research unit also says global steel prices in the second half of 2021 is likely to remain toppish due tofiscal stimuli globally, recovering economic activities as well as the steel production capacity cut in China.
Under a best-case scenario, the strong uptrend in steel prices may last until 2022. However, there is apossibility China may want to step in to calm the steel prices as it would hurt local steel users.
“For instance, China has recently removed tax rebates on exports for certain steel products in order todiscourage exports while reducing the import duties for certain steel-making raw materials, ” notes theresearch unit.
Meanwhile, steel-related companies in
Malaysia are also optimistic about theirfinancial performance this year. In its
2020 annual report filed with Bursa,
Masteel said it was cautiously optimisticthat the worst is behind the company
and 2021 could be a promising year
ahead due to the government’s
experience in handling the Covid-19
pandemic, stricter adherence tostandard operating procedures and an
expedient vaccine rollout programme.
Masteel, which produces steel billets
and steel bars for the construction andinfrastructure sectors, noted that the Malaysian construction sector is expected to rebound by 13.9% in
2021, due to the acceleration and revival of major infrastructure projects. Masteel sources about 70% of its
scrap metal requirement locally.
“With the imposition of 15% export duty on the export of local scrap metal, effective March 25,2021,
Masteel expects its cost of billet production to improve,” it said. The issue of oversupply in the local steel
sector due to imports in the Malaysian market is also mitigated via the International Trade and Industry
Ministry’s (Miti) anti-dumping duty on steel products from Singapore and Turkey, gazetted on Jan 21,2020.
On April 26,2021, Miti also announced the imposition of anti-dumping duties on imports of cold-rolledstainless steel from Indonesia and Vietnam for five years until April 23,2026.

Masteel noted that while still posing a significant risk, the oversupply from the operations of a Chinaowned steel mill in Kuantan is expected to be reduced due to China’s buoyant demand for steel bars andbillets, which allows the China-owned steel mill to export its steel products back to China.
3. China Steel Body Sees Prices Stabilising, Helped by Crackdown on Speculation
Date: 24 May 2021
Source: https://www.reuters.com/business/energy/china-steel-body-sees-prices-stabilising-helped-bycrackdown-speculation-2021-05-24/

Chinese steel prices are expected to stabilise as demand softens in the near term and a round ofgovernment inspections aims to stop speculation and irregularities, the China Iron and Steel Association(CISA) said on Monday.
Prices in the world's top steel producing country surged in April and have fluctuated this month, driven byrobust domestic demand, rising raw material costs and a global easing of liquidity, according to the CISA.
China's steel price index jumped 9.25% to 148.88 by the end of April compared with a month earlier, datacompiled by the steel body showed. CISA said it expected demand to weaken over the coming period as
construction activities slow during the rainy season while the autos and home appliances sectors are also
entering their off-peak season.
Production levels at steel mills remain high, and growing unwillingness by downstream users such as the
shipbuilding industry to keep paying the high prices seen since April is also expected to put downward
pressure on prices.
"From the domestic situation, the supply and demand sides of steel products did not show overall or
trending changes, steel prices do not have the basis for sustained and substantial increases," CISA said on
its official WeChat account.
It also cited a planned government crackdown on market irregularities as a factor in the expectedstabilisation of prices. China's market regulators warned industrial metal companies to maintain "normal
market order" during talks on Sunday, with the main economic planning body saying that firms "should notcollude with each other to manipulate market prices ... hoard goods and drive-up prices".

China's steel rebar and hot rolled coils futures on the Shanghai Futures Exchange closed down 3.6% and3.9% respectively on Monday after the announcement from the economic planner. Benchmark iron ore
futures plunged 5.2% at 1,064 yuan ($165.48) a tonne at close. ($1 = 6.4297 Chinese yuan renminbi).
4. Dalian Iron Ore Extends Fall as China Steel Demand Dims
Date: 9 June 2021
Source:https://www.hellenicshippingnews.com/dalian-iron-ore-extends-fall-as-china-steel-demanddims/
Benchmark Dalian iron ore futures fell for a third straight session on Tuesday, as a slidein steel prices in China spurred by signs of slowing demand dragged down the raw
material.
The most-traded iron ore for September delivery on China’s Dalian Commodity
Exchange ended daytime trading 0.7% lower at 1,149 yuan ($179.81) a tonne, after
dropping as much as 4.5% to its lowest since June 1.
The decline in China’s inventory of construction steel rebar slowed sharply last week, indicating easing
demand, which has been anticipated with the monsoon season bringing rains to southern provinces while
scorching temperatures hit the north.
However, it might be a little too early to worry about steel demand in China, said Atilla Widnell, managing
director at Navigate Commodities in Singapore.
Iron ore’s most-active July contract on the Singapore Exchange rose 3.1% to $199.85 a tonne by 0709 GMT,
after earlier falling as much as 2%.
China’s rebar inventories have fallen more than 40% from the peak seen in March, while the country’s
stocks of hot-rolled coil — which is used in car bodies and home appliances — fluctuated over the last five
weeks, SteelHome data showed.
“The devil is in the detail, however, and we recommend waiting for two more weeks’ worth of data points
to confirm whether construction steel demand is entering its seasonal slowdown,” Widnell said.
Rebar on the Shanghai Futures Exchange shed 1.8%, while hot-rolled coil fell 1.7%, both hitting theweakest since June 1 in early trade. Stainless steel SHSScv1 dropped 1.5%.
Other steelmaking ingredients held ground, with Dalian coking coal edging up 0.2% and coke advancing
0.5%. Spot iron ore in China dropped to $203 a tonne on Monday, from Friday’s $207, off about 12% fromlast month’s record peak, SteelHome data showed.

5. Wenan Steel Project at Site Preparation Stage
Date: 24 June 2021
Source: https://www.theborneopost.com/2021/06/24/wenan-steel-project-at-site-preparation-stagemintred/
KUCHING (June 24): The RM13.8 billion Wenan Steel project at Samalaju Industrial Park in Bintulu is now at
its site preparation stage, said a statement from the Ministry of International Trade and Industry, Industrial
Terminal and Entrepreneur Development (Mintred).
It said the site preparation works on 700 acres of land for Phase 1 of this project is expected to becompleted by April 2022 and theconstruction of the factory willcommence thereafter.
Due to the pandemic and theMovement Control Order (MCO), theproject is facing some delay in its
implementation.
“Wenan Steel targets to commence
operation by end of 2024. Whencompleted, the RM13.8 billion steel
plant will be one of the major steel producers in the region,” it said in a statement following a virtual
meeting on the project yesterday.
The meeting saw Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan being briefed by Wenan Steel(Malaysia) Sdn Bhd managing director Gao Wei and MCC Overseas (M) Sdn Bhd general manager Chen Qi
on the latest development of the project.
Awang Tengah, who is also International Trade and Industry, Industrial Terminal and Entrepreneur
Development Minister, was joined by Mintred permanent secretary Datu Liaw Soon Eng, and generalmanager of Bintulu Development Authority Muhamad Yakup Kari at the meeting.
According to previous news reports, the Wenan steel manufacturing facility will be the largest steel
manufacturing plant in Southeast Asia once completed, and is projected to have a production capacity often million tonnes per annum.

6. Hiap Teck Records Higher Earnings as Steel Prices Rise
Date: 30 June 2021
Source: https://www.thestar.com.my/business/business-news/2021/06/30/hiap-teck-records-higherearnings-as-steel-prices-rise
PETALING JAYA: Steel company Hiap Teck Venture Bhd has posted a huge jump in its net profit to
RM65.93mil for its third quarter ended April 30, from RM4.92mil a year ago on the back of rising steel
prices.
The group’s revenue doubled in the quarter from RM164.59mil to RM329.64mil, attributable to higher sales
volume and higher steel prices.
In a filing with Bursa Malaysia, Hiap Teck said its strong performance was also due to the sharp turnaroundof its joint-venture (JV)entity, which contributed RM19.81mil to the group for the quarter as compared to
RM4.85mil in the same period a year ago.
The JV entity’s improved performance can be attributable to higher steel prices and cost savings arising fromthe 55MW power plant completed in October 2019.
While the positive outlook for the construction sector is forecast to boost the local apparent steel
consumption by 7.5% in 2021, Hiap Teck said the imposition of movement restrictions and extensions will
have a negative impact on the performance of the group in the final quarter of the current financial year.
“Nonetheless, the board and management remain confident on the outlook of the group post lockdown,
given the strength of steel prices and the JV entity’s
continuous investments in plant and equipment toachieve cost efficiencies.
“The JV entity’s first 200, 000-tonne coke oven plantis expected to be completed by the second half of2021 in which substantial cost savings can beachieved,” it said.
The civil engineering sector is expected to recover inline with the ramp-up of construction activities andthe impending rollout of large-scale infrastructure
projects while launches of affordable housing
projects in the previous years will continue to provide support for activity in the residential sub-sector,
according to Hiap Teck.

ABOUT MSI
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technology and economic aspects of iron and steel industry development in Malaysia; and to promote iron andsteel product standardisation and utilisation within Malaysia. For more information, please visit
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