December 2021

NOTICEBOARD

THE STEELBILLETREBARSTEEL WIRE ROD

RM2,688

RM3,063

RM3,250SCRAPIRON ORE

RM2,010RM470

TRADE PERFORMANCE
Malaysia’s Trade Performance from January-December 2021
Malaysia’s Iron and Steel trade value in December 2021 was recorded at RM6.9 billion, it grew by 62.5
percent compared to RM4.2 billion in December 2020. Trade balance has widened from trade deficit of
RM71.1 million in December 2020 to trade deficit of RM446.6 million in December 2021.
Malaysia’s export in December 2021 has expanded by 54.5 percent to RM3.2 billion from RM2.1 billion in
December 2020. Three main export destinations in December 2021 were seen to China, Indonesia andThailand, represented by 41, 5 and 4 percent of the total export value in the month, respectively.
Malaysia’s import in December 2021 grew by 70.2 percent to RM3.7billion from RM2.1 billion in December
2020. Top three Malaysia’s import countries in December 2021 were China, Japan and Korea, represented
by 18, 17 and 11 percent of the total import value in the month, respectively.
From January to December 2021, the trade value of Iron and Steel products stood at RM62.9 billion in 2021
compared to RM48.2 billion in the same period of 2020, it rose by 30.5 percent. Trade balance has widened
from trade deficit of RM1.1 billion in January to December 2020 to trade deficit of RM4.0 billion during thesame period of 2021.
Malaysia’s export in January to December 2021 surged by 24.9 percent to RM29.4 billion from RM23.6
billion in 2020. Imports accelerating by 35.7 percent to RM33.5 billion in January to December 2021 from
RM24.6 billion during the same period of 2020.

Malaysia Trade Performance of Iron & Steel Industry
Dec 2021: RM6.9billion

Month Trade Value
62.5 % M-o-M change

Dec 2020: RM4.2billion

Dec 2021: RM446.6million
Trade Deficit

Month Balance ofTrade528.1 % M-o-M change

Dec 2020: RM71.1million
Trade Deficit
Month Export
Dec 2021: RM3.2billion
54.5 % M-o-M change

Dec 2020: RM2.1billion

Month Import
Dec 2021: RM3.7billion

70.2 % M-o-M change

Dec 2020: RM2.1billion

YTD Trade Value
Jan-Dec 2021: RM62.9billion
30.5 % Y-o-Y change

Jan-Dec 2020: RM48.2billion

Jan-Dec 2021: (RM4.0billion)
Trade Deficit
Jan-Dec 2021: (RM1.1billion)
Trade Deficit

YTD Balance of Trade267.8 % Y-o-Y change[AUTHOR NAME]

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MSI WITH YOU
HRD CORP REBRANDING AND UPSKILLING PROGRAMME PROMOTION
On 2nd December 2021, HRD Corp which was previously known as HRDF (HUMAN RESOURCE DEVELOPMENT
FUND) organized an event to commemorate the rebranding exercise. The event was officiated by the Prime
Minister, Dato’ Sri Ismail bin Sabri. Alongside the event, HRD Corp also allowed booth space for variousorganizations to promote various programmes. Among the booth was a section for upskilling whereorganisations participate in the PENJANA or RMK-12 training programmes to promote each program. Mr. LaiLeong Chon of MSI was also one of the speakers in a pocket talk series for the event.

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100 HARI ASPIRASI KELUARGA MALAYSIA
From the 9th to the 12th December 2021, MSI being under the purview of the Ministry of International Trade andIndustry participated in the ‘100 Hari Aspirasi Keluarga Malaysia’ event at the Kuala Lumpur Convention Centre.
The event was meant to showcase the achievements of all the ministries within the past 100 days. The event
was attended and officiated by the Prime Minister, Dato’ Sri Ismail bin Sabri. It is also attended by senior
ministers of all ministries as well as secretary general from each ministry.

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4MITI APPRECIATION DINNER
On the 9th December 2021, The Ministry of International Trade and Industry hosted an appreciation dinner for
staff of the ministry and its agencies. MSI represented by CEO Mr. Lim Keng Yow attended the dinner which washeld at Dewan Perdana, MITI tower. The event was officiated by Senior Minister of International Trade andIndustry, Dato’ Seri Azmin bin Ali.

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PARLIAMENTARY SUPPORT SESSION IN REGARDS TO THE RMK-12 PROGRAMME
On 7th December 2021, MSI attended the parliamentary support session at MITI. MSI attended to support on
answering questions related to the RMK-12 programme. The session was attended by the Ministry ofInternational Trade and Industry Secretary General Datuk Lokman Hakim bin Ali as well as staff from the ministry.

VISIT FROM POSCO-MALAYSIA AND YE CHIU NON-FERROUS METAL (M) SDN BHD
On 13th & 14TH December 2021, MSI received a courtesy visit from Posco-Malaysia in the MSI office at MITI towerin Kuala Lumpur. The visit bids farewell to Mr John Myoung, the Senior Manager of Posco-Malaysia as he isleaving for Korea after serving for 3 years in Malaysia office. Mr Peyton Chaeeuirim, will serve as the new Senior
Manager of Posco-Malaysia. MSI also presented a membership plaque to Mr. Ng, Marketing Manager of Ye Chiu
Non-Ferrous Metal (M) Sdn Bhd. Ye Chiu has been an Associate member since 10 March 2021.

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COURTESY VISIT TO CONSTRUCTION INDUSTRY DEVELOPMENT BOARD (CIDB) AND MYBIMCENTRE MALAYSIA
On the 17th December 2021, CEO of MSI, Mr. Lim Keng Yow paid a courtesy visit to myBIM Malaysia andConstruction Industry Development Board (CIDB). The visit was accompanied by Mr. Donahue from BIMAGE.
The meeting also discussed on upcoming event titled Industrial forward for steel industry where CEO of MSI will
be invited as the guest speaker for this event.

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DEEPAVALI AND CHRISTMAS LUNCH AT MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY(MIDA)On the 23rd December 2021, MSI was invited to a Deepavali and Christmas luncheon networking event
organized by the Malaysian Investment Development Authority (MIDA) at their headquarters in MIDA Sentral,
Kuala Lumpur. MSI attended the event which was officiated by CEO of MIDA, Dato’ Arham Abdul Rahman.

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MSI BRIDGING GAPSNOSS WEBINAR 2021
On 8th December 2021, MSI was in attendance of the NOSS (National Occupational Skills Standard) webinar
2021 titled “Needs in Improving Skill and Career” which was organized by the Department of Skills
Development, formerly known as the National Vocational Training Council.

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9SEMINAR ON CIRCULAR DESIGNOn 16th December 2021, MSI attended a seminar on circular design organized by the Malaysia Design Council(MRM) which was held at the Everly Putrajaya Hotel. The main objectives of the seminar includes information
sharing sessions from professional speakers, to promote and encourage the concept of circular design as one
the ways for environmental conservation and wealth generation, providing input and ideas to industry players
and participants with the goal of producing innovative products based on circular design and provide exposure
to relevant industries on standards and Acts as well as funds offered by the government in the field of circular
design in Malaysia.

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MSI TRUPENJANA PROGRAMME BATCH 3 & 6 BRIEFING SESSION
On 1st & 3rd December 2021, MSI organized a briefing session for batch 3 & 6 participants respectively for the
PENJANA programme before the programme begins in which the participants will go through 10 days of paid
training and subsequently 2 months of on-the-job training.

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NEW INDUSTRIAL MASTER PLAN SYNDICATION SESSION AT MITI
On the 10th December 2021, MSI represented by CEO Mr. Lim Keng Yow participated in the new industrial
master plan syndication session at MITI.

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12STEEL FACTS[AUTHOR NAME]

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EVENTS HIGHLIGHT[AUTHOR NAME]

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STEEL NEWS
1. Steel industry set to pivot to hydrogen in US$278b green push
Date: 08 December 2021
Source: Steel industry set to pivot to hydrogen in US$278b green push | The Edge Markets
KUALA LUMPUR (Dec 8): Steel production could be made with almost no carbon emissions through US$278
billion (RM1.17 trillion) of extra investment by 2050. BloombergNEF (BNEF), a strategic research provider
covering global commodity markets and disruptive technologies, in its report titled “Decarbonizing Steel: A
Net-Zero Pathway” released last week said hydrogen and recycling are likely to play a central role in
reducing emissions from steel production. It said steel is responsible for around 7% of man-madegreenhouse gas emissions every year and is one of the world’s most polluting industries. The report outlined
the path to making profitable, low-emissions steel and describes that a combination of falling hydrogencosts, cheap clean power, and increased recycling could reduce emissions to net zero, even while total
output increases. It said by 2050, green hydrogen could be the cheapest production method for steel andcapture 31% of the market. Another 45% could come from recycled material, and the rest from a
combination of older, coal-fired plants fitted with carbon capture systems and innovative processes using
electricity to refine iron ore into iron and steel. This would be a dramatic shift in the type of furnaces andfuels used to produce steel. Today, around 70% of steel is made in coal-fired blast furnaces, with 25%
produced from scrap in electric furnaces, and 5% made in a newer, typically natural gas-fired process known
as direct reduced iron (DRI). Converting a significant portion of the fleet to hydrogen would require more
DRI plants and electric furnaces. Blast furnace production would fall to 18% of capacity in this scenario.
BNEF head of sustainable materials and lead author of the report Julia Attwood said the steel industry
cannot afford to wait for the 2040s to start its transition. “The next 10 years could see a massive expansionof steel capacity to meet demand in growing economies, such as India. Today’s new plants are tomorrow’s
retrofits. “Commissioning natural gas-fired plants could set producers up to have some of the lowest-cost
capacity by retrofitting them to burn hydrogen in the 2030s and 2040s. “But continuing to build new coalfired plants will leave producers with only bad options toward a net-zero future by 2050,” she said. Attwood
said that in order to achieve this transformation, there are five key actions for the sector to consider - boost
the amount of steel that is recycled, particularly in China; procure clean energy for electric furnaces; design
all new capacity to be hydrogen or carbon capture-ready; begin blending hydrogen in existing coal- and gasbased plants to lower the cost of green hydrogen; and retrofit or close any remaining coal-fired capacity by
2050. Meanwhile, BNEF head of industrial decarbonisation Kobad Bhavnagri said the global steel industry
is poised to begin a titanic pivot from coal to hydrogen. “Green hydrogen is both the cheapest and mostpractical way to make green steel, once recycling levels are ramped up. “This transition will cause both great
disruption, and great opportunity. “Companies and investors don’t yet appreciate the scale of the changes
ahead,” he said. BNEF estimates that new clean capacity and retrofits for lower emissions will cost the steel
industry an additional US$278 billion compared to business-as-usual capacity growth. This is a relatively
modest figure, compared to the US$172 trillion estimated by BNEF to decarbonise the global energy sector.
Most of the costs to make green steel come from operations, rather than capital costs.

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2. Malaysia must not lose out as steel industry shifts to hydrogen.
Date: 15 December 2021
Source: Malaysia must not lose out as steel industry shifts to hydrogen (nst.com.my)
STEEL is an indispensable material. The construction industry will grind to a halt without enough steel.
But, in this era of low carbon and net zero emissions, steel is seen as the bad boy of global climate action
targets. Because of its voracious appetite for fossil fuels, especially coal, the industry contributes massively
to the world's greenhouse gas (GHG) emissions. It has been estimated that the industry contributes about
seven per cent of the global GHG emissions each year. By going net zero, steel will remove much pressure
on global warming. Scientists have been working for years to develop a substitute for steel, but so far, to
no avail. The steel industry is aware of the burden it imposes on the world. Efforts are under way to makeamends and improve the greenness of steel. BNEF, a research provider studying global commodity markets
and disruptive technologies, has released a report titled "Decarbonizing Steel: A Net-Zero Pathway". This isseen as paving the way for a sort of revolution in the steel industry. The sector's past hesitance to moveaway from fossil energy is about to end. The report suggests hydrogen and recycling are likely to play acentral role in reducing emissions from steel production. But, the cost to change is going to be enormous.
The report estimates that steel production could be made with almost no carbon emissions through US$278
billion (RM1.17 trillion) of extra investment by 2050. The formula towards low-emissions steel would
involve a combination of falling hydrogen costs, cheap clean power and increased recycling. They could
reduce emissions to net zero, even while output increases. The report predicts that by 2050, greenhydrogen could be the cheapest production method for steel and may capture 31 per cent of the market.
Another 45 per cent could come from recycled material, and the rest from a combination of older, coalfired plants but fitted with carbon capture systems and innovative processes using electricity to refine ironore into iron and steel. There would be a dramatic shift in the type of furnaces and fuels used to produce
steel. Today, according to the report, around 70 per cent of steel is made in coal-fired blast furnaces, with
25 per cent produced from scrap in electric furnaces, and five per cent made in a newer, typically natural
gas-fired process known as direct reduced iron. Converting a significant portion of the fleet to hydrogen
would require more such gas- fired plants and electric furnaces. Blast furnace production is predicted to fallto 18 per cent of capacity in such scenario. The report predicts that the next 10 years could see a massive
expansion of steel capacity to meet demand in growing economies, such as India. And commissioning
natural gas-fired plants could set producers up to have some of the lowest-cost capacity by retrofitting
them to burn hydrogen in the 2030s and 2040s. In order to achieve this transformation, the report has
proposed five key actions for the sector — boost the amount of steel that is recycled, particularly in China;
procure clean energy for electric furnaces; design all new capacity to be hydrogen or carbon capture-ready;begin blending hydrogen in existing coal- and gas-based plants to lower the cost of green hydrogen; andretrofit or close any remaining coal-fired capacity by 2050. Experts view green hydrogen as the cheapest
and most practical way to make green steel, once recycling levels are ramped up. There is, however, no
doubt that the transition will cause great disruption and great opportunity. On that journey, there will beenormous opportunity for R&D. The change is seen as fertile ground for new research and innovation. These
are the types of R&D which promises a strong impact on industry and society. Countries around the world
are scrambling to put in place plans to capture a slice of the emerging hydrogen businesses. Green hydrogenis the prime target. We, in Malaysia, also should not miss the boat. We should no longer delay the initiative
to put in place a workable blueprint on hydrogen.

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3. Lion indusries buys direct reduced iron plant in Banting for RM38m
Date: 16 December 2021
Source: Lion Industries buys direct reduced iron plant in Banting for RM38m | The Edge Markets
KUALA LUMPUR (Dec 16): Lion Industries Corp Bhd said it is acquiring a direct reduced iron (DRI) plantin Banting, Selangor for US$9 million (RM38.07 million) to supplement its existing steel operations. In
the related party transaction, Lion Industries’ 99%-owned subsidiary Amsteel Mills Sdn Bhd is buying
the plant from Lion DRI Sdn Bhd. Lion DRI is a unit of Lion Diversified Holdings Bhd, which is inliquidation. In a bourse filing, Lion Industries said the DRI plant is being acquired at a premium of
RM5.57 million, based on a valuation of RM32.5 million by PPC International Sdn Bhd reported in
March and updated in November. It added that the purchase consideration is justifiable as the plant
has ceased operations since February/March 2016 and is considering the prevailing market price ofscrap metal. The acquisition will be funded using funds secured from the sale of Antara Steel Mills Sdn
Bhd, which was completed on Dec 10, said Lion Industries. Shares of Lion Industries settled unchanged
at 60.5 sen on Thursday (Dec 16), giving the group a market capitalisation of RM434.34 million.
4. Another call to lift ban on scrap iron exports
Date: 27 December 2021
Source: Another call to lift ban on scrap iron exports (theborneopost.com)
KOTA KINABALU (Dec 27): The Sabah Scrap Metals Recycle Association (SSMRA) has again called on
the State Government to lift the ban on scrap iron exports it imposed in June. Its president, Edwin
Chen, said the ban had resulted in an accumulation of scrap iron by SSMRA members and also the
reduction in the price of the raw material. “We have informed Industrial Development Minister Datuk
Dr Joachim Gunsalam that currently Unimekar is unable to consume the entire collection of scrap ironin the state, but the State Government blindly favored the steel mill and did not listen to us,” said
Chen in a statement on Monday. He pointed out that the government’s ban on the export of scrap
iron was issued in June this year, mainly because Unimekar, the sole steel mill in Sabah, complained
about insufficient raw materials (scrap iron). “Now the scrap iron accumulated by our (SSMRA)
members in various parts of Sabah has increased from 26,000 metric tons to more than 30,000 metrictons, and Unimekar’s agents have stopped quoting prices and purchasing the raw material from ourmembers who are now facing difficulties with cash flow, in bank commitments and customers’
payments,” he lamented. According to Chen, since the ban was implemented, the purchase price ofscrap iron by Unimekar’s agent dropped from RM1,750 per metric ton to around RM1,500. He claimed
that by purchasing at a price of between RM300 and RM400 per metric ton below the market pricefrom local scrap iron dealers proves that some people are monopolizing the market to make huge
profits. “If Sabah can produce 15,000 metric tons of scrap iron every month, that would be a difference
between RM4.5 million to RM6 million per month compared to the price in Peninsular Malaysia,” heclaimed further. Chen said that Dr Joachim personally stated in the State Assembly sitting early thismonth in December that he would guarantee that Unimekar would buy scrap iron from local scrap
dealers at current market prices. “We hope that the minister can take immediate action to ensure thatthe purchase price is based on the market price. It is understood that Malaysia’s Competition Act is toprevent all forms of commercial monopoly, promote healthy competition, protect all free commercial
trade, and take care of the interests of the people,” he said.Can banning the export of scrap iron help
stabilize the price of rebar, Chen asked, adding facts have proved that during the period when theexport of scrap iron was banned, the price of steel rebar in Sabah did not fall because the price wasdetermined by the import price of international steel bars.
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It could not be determined by a single factory and the prohibition of exports of scrap iron could not
depress the steel price, because iron steel is an international commodity, following the trend of theinternational market, he pointed out.He also said that the allegation of scrap dealers usually holding
80,000 metric tons of scrap metal inventory with the purpose of buying at low prices and selling athigh prices is inaccurate. “According to our statistics, we have never held a one-time inventory of
80,000 tons of scrap iron. That is worth over RM100 million in today’s market price. We hope due
diligence can be done before any false reports are made. “We have previously mentioned in the media
that before the local steel mill was in operation, our business method was to accumulate enough scrap
iron and ship it to steel mills within Malaysia,” he said. Chen added that merchants are stocking theirown scrap iron according to their own financial and operational capabilities. They also need toevaluate the risks of price dropping as the international market is fluctuating. On the other hand, it iswrong to use a monopolization of trade to make money and to oppress other competitors in order toobtain huge profits, he said. “SSMRA members have repeatedly emphasized that we have been living
and doing business in Sabah for 20-30 years, and we love Sabah and Malaysia. The scrap metal
recycling industry is an important upstream industry in the iron and steel industry. “Under the premiseof fairness and reasonableness, we are willing to help any iron melting plant to support thedevelopment of the iron and steel industry in Sabah. However, we will never allow anyone tomonopolize our recycling industry for any reason, oppress the free and fair business of Sabah people,
and suppress prices to make huge profits,” he stressed. Meanwhile, responding to the Federation of
Malaysian Manufacturers (FMM) Sabah chairman James Ha Haw Yew’s statement, Chen said theformer should not compare the failure of timber manufacturing to this case, as this is unfair toeveryone. “We welcome Ha to contact our association, to understand more about our difficult
situation. Finally, we hope that the Sabah government can understand our difficulties and immediately
lift the ban on scrap iron exports, let free trade be implemented, and bring success and prosperity to
all Sabah people in a fair and just manner,” he said.
5. 11-month trade exceeds RM2 trillion for first time
Date: 28 December 2021
Source: 11-month trade exceeds RM2 trillion for first time (thesundaily.my)
PETALING JAYA: Malaysia’s total trade for January to November 2021 surpassed the RM2 trillion markfor the first time, expanding by 24.6% from the corresponding period in 2020. Consistent with thetrade’s performance, exports and imports for the 11 months period also registered double-digit
growths of 25.7%, with a value of RM1.1 trillion and 23.3%, which amounted to RM894.4 billion,
respectively. Meanwhile, trade surplus expanded by 36.2% to RM221.5 billion compared to the same
period in 2020. Malaysia’s export performance in November 2021 saw a 32.4% leap to RM112.2 billion
compared to the same month of the previous year supported by both domestic exports and reexports, marking the fourth consecutive month of double-digit growth since August. The Departmentof Statistics Malaysia’s (DOSM) external trade statistics reported a strong growth for imports at 38%
year-on-year (y-o-y). Consequently, the country’s total trade expanded by 34.9% y-o-y to RM205.5
billion for November 2021. Chief statistician Datuk Seri Dr Mohd Uzir Mahidin stated that domestic
exports stood at RM93.7 billion and contributed 83.5% to the total exports, widened by 34.3%. Reexports registered RM18.5 billion, increased by 23.9% as compared to November 2020. Uzir noted themonths saw a trade surplus valued at RM18.9 billion, the 19-straight month of trade surplus since May
2020. “In accordance to the recovery in global economic activity, the month-on-month performanceof imports and total trade were also remarked positive growths, higher by 5.9% and 1.5%, respectively.

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In contrast, exports decreased marginally by 1.9% and trade surplus declined by 28.1%,” he said in astatement. The report also revealed 192 out of 255 commodity groups for exports saw better
performance compared to the same month of the previous year, while imports saw 191 of 258 groups
posted positive growths. In terms of destination, it reported a higher export to the US (+RM3.3 billion),
followed by China (+RM2.9 billion), Singapore (+RM2.6 billion), Vietnam (+RM2.5 billion), theEuropean Union (+RM2.1 billion), India (+RM2 billion), Indonesia (+RM1.9 billion), Japan (+RM1.4
billion) and Korea (+RM1.2 billion). Meanwhile, the month’s export expansion was driven by electrical& electronic products (+RM5.9 billion); petroleum products (+RM5.1 billion); palm oil & palm oil-based
agriculture products (+RM3.9 billion); manufacture of metal (+RM2.5 billion); chemical products(+RM2 billion); liquefied natural gas (+RM1.9 billion); palm oil-based manufactured products (+RM1.3
billion); machinery, equipment & parts (+RM1.1 billion) and iron & steel products (+RM1 billion).

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20ABOUT MSI
Malaysia Steel Institute (MSI) is an industry driven enterprise supported and funded by the Ministry of International
Trade & Industry (MITI) on shared responsibility basis with the industry. The main objectives of MSI are to promoteand develop the competitiveness, resilience and sustainability of the Malaysian Iron and steel industry; to provide
advisory services and to carry out commission or promote the study of scientific, technology and economic aspectsof iron and steel industry development in Malaysia; and to promote iron and steel product standardization andutilization within Malaysia. For more information, please visit malaysiasteelinstitute.com and follow us on Facebook,
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