August 2022
Trade Performance
Malaysia’s Trade Performance, January-August 2022
Malaysia’s Iron and Steel total trade value in August 2022 grew by 10.6 percent to RM5.8 billion compared toRM5.2 billion in August 2021 for the same period. Trade balance has improved to trade surplus of RM18.3
million from trade deficit of RM365.5 million for the same comparison period.
Malaysia’s iron & steel export in August 2022 increased by 19.2 percent to RM2.9 billion from RM2.4 billion inAugust 2021. Three main export destinations in August 2022 were Hong Kong, Indonesia and Singapore
accounting for 18.4, 17.1 and 9.0 percent of the total export value respectively.
Malaysia’s iron & steel import in August 2022 rose by 3.1 percent from 2.8 billion in August 2021 to 2.9 billion in
August 2022. Imports from China, Japan and Taiwan accounted for the top three (3) spots representing 32.4,
11.8 and 11.4 percent of the total import value, respectively.
From January to August 2022, the total trade value of the Iron and Steel products stood at RM46.9 billion in 2022
compared to RM38.9 billion in the same period in 2021, an increase by 20.7 percent. Further, the trade balance
improved from a trade deficit of RM4.2 billion in 2021 to a trade deficit of RM1.4 billion in 2022 during the same
period of comparison.

Malaysia Trade Performance of Iron & Steel Industry
August 2022: RM5.8billion

Month Trade Value
10.6 % M-o-M change

August 2021: RM5.2billion

August 2022: RM18.3million
Trade Surplus

Month Balance of Trade105.0 % M-o-M change

August 2021: (RM365.5million)
Trade Deficit
Month Export
August 2022: RM2.9billion
19.2 % M-o-M change

August 2021: RM2.0billion

Month ImportAugust 2022: RM2.9billion
3.1 % M-o-M change

August 2021: RM2.8billion

YTD Trade Value
Jan- August 2022: RM46.9billion
20.7 % Y-o-Y change
Jan- August 2021: RM38.9billion

Jan- August 2022: (RM1.4billion)
Trade Deficit

YTD Balance of Trade
66.0 % Y-o-Y change

Jan- August 2021: (RM4.2billion)
Trade Deficit[AUTHOR NAME]

2MSI WITH YOU
MAJLIS PELANCARAN ‘ACADEMY IN
FACTORY’ SEMPENA KARNIVAL BELIAPRODUKTIF BERTEMAKAN “BERSAMAMEMBANGUNKAN NEGARA”.
On 11th August 2022, Malaysia Productivity Corporation(MPC) organised Majlis Pelancaran ‘Academy in Factory’Sempena Karnival Belia Produktif Bertemakan “BersamaMembangunkan Negara” which has been inaugurated by
YB Dato’ Seri Mohamed Azmin Ali, Senior Minister andMinister of International Trade and Industry (MITI). The
organisation of these events aims to promote and provide opportunities for the country's youth to be involvedin the Academy in Factory (AIF) initiative implemented by the MPC in collaboration with relevant ministries andgovernment agencies as well as business and industry associations. AIF is an innovative intervention toovercome labour shortages in key sectors of the economy, in line with the Twelfth Malaysia Plan (RMK12),
which emphasises the development of future talent. At the same time, it aims to improve the educational
attainment of Malaysians and provide opportunities for students who have dropped out of mainstream
education to continue work-based studies.

VISIT TO P.P. STEEL SDN. BHD.
On 23rd August 2022, Mr. Lim Keng Yow and Mrs. Syakirah represented MSI was
made a visited to the P.P. Steel Sdn Bhd located at Kawasan Industri Rawang
Intergrated, Rawang Selangor. The visit was to present the certificate andmembership plaque to P.P Steel Sdn Bhd as an Associate Member of MSI which
will come into force on 28 March 2022. P.P Steel Sdn Bhd was established since
1989 with the primary and secondary products range include Hot Rolled,
Pickled & Oiled, Cold Rolled, Electro Galvanized, Galvanized Iron, Zincalume,
Galvannealed, Pre-painted Galvanized Iron and Colorbond.

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MAJLIS DIALOG KEMENTERIAN PERDAGANGAN ANTARABANGSA DAN INDUSTRI(MITI) 2022
The MITI 2022 Dialogue Session on 25th August 2022 was held to exchange views with business representatives,
Malaysian industry associations and national and international chambers of commerce regarding strategies andsolutions towards greater enhancement of the country's trade and investment ecosystem.
The dialogue sessions saw the participation of 12 ministries and 151 organizations. MITI had received 96
memorandums covering 24 categories out of a total of 396 issues submitted for the Government's consideration.

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4VISIT BY PENJANA EKO SDN BHD & RAM SUSTAINABILITY SDN BHD ONENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)On 25th August 2022, Penjana Eko Sdn Bhd and
RAM Sustainability Sdn Bhd visited Malaysia
Steel Institute (MSI) to discuss on the mutual
beneficial
collaboration
inregard
toEnvironmental, Social and Governance (ESG) for
the Iron and Steel industry. Penjana Eko provides
management consultancy services and aresoftware providers in sustainability, with aparticular emphasis on ESG and risk
management while RAM Sustainability offers
Environmental, Social and Governance (ESG)
ratings, risk assessments and related ESG
services and consultancy to companies.

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5MSI BRIDGING GAPS
COURTESY VISIT BY CIDB HOLDINGS SDN
BHD
On 8th August 2022, MSI was visited by CIDB Holding Sdn.
Bhd. This visit was to promote the “ASSURE” system tothe iron and steel industry. The “ASSURE” system is thenew system that will be used to facilitate productcertification and consignment test for importers ofconstruction product certification and consignment testfor importers of construction products or materials, which
is a compulsory requirement to obtain PPS.

ANTI-BRIBERY MANAGEMENT SYSTEMS CERTIFICATION CORPORATE LIABILITY &EFFECTIVE MECHANISM TO COMBAT CORRUPTION
MSI was invited by MITI to attend the one session of ABMS Briefing on 9th August 2022. The objective of thisprogramme was to provide knowledge and guidance to MITI agencies on the basis of ABMS development andcertification, as well as review for agencies that are developing ABMS. As all agencies under MITI is required toobtain MS ISO 37001:2016, Anti-Bribery Management System (ABMS) certification from SIRIM. MSI wasrepresented by Mrs. Lee Hooi Lan and Mrs. Juliana Ahmad.

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6JABATAN KERJA RAYA (JKR) VISIT TO MSIJKR visited MSI on 19th August 2022 to seek MSI’s
assistance in getting the products specification from thelocal steel manufacturers to be incorporated in JKR
Library (BIM system) that could be used for design,
costing, inventory, auditing, etc. At the same time topromote local content. The adaptation of BIM in theprocess of value engineering, green rating and various
initiatives in line with the synergy of sustainabledigitisation.

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MSI TRU
BRIEFING TO RMK12 IRON & STEEL TRAINING PROGRAMME (BATCH 9)
On 8th August 2022, the 9th batch of the RMK-12 Iron and SteelIndustry Training Programme - Extensive has been commenced.
This programme had a variety of 16 participants to be recruitedby 3 steelmaking companies once they finish the training. Taught
through a hybrid platform over the path of 15 training days by anexperienced trainer and followed by a 1 month of on-job training

at the respective company.

BRIEFING TO RMK12 IRON & STEELTRAINING PROGRAMME (BATCH 10)
On 10th August 2022, the tenth batch of the RMK-12and Steel Industry Training Programme - Extensive
started. This batch consists of 22 participants recently
recruited by a steelmaking company for variousdepartments. The programme is taught physically forIron

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days by an experienced trainer.

SUSTAINABLE TRAINING WITH MYCRON STEEL BERHAD
On 18th and 19th August 2022, MSI developed and conducted customised training named ‘Creating A
Sustainability Culture’ for Sustainable Committee Members of Mycron CRC Steel Sdn Bhd. An expert on the topic
has been invited to conduct the 2 days classes training including case discussion on sustainable projects. Theparticipants gave good overall feedback on the training.

HAZARD IDENTIFICATION, RISK ASSESSMENT & RISK CONTROL (HIRARC)
On 23rd August 2022, at Amsteel Mills in Klang, MSI delivered a customised training programme called "Hazard
Identification, Risk Assessment & Risk Control (HIRARC)". A day of classroom instruction with a case study on
safety initiatives was led by a subject specialist. Overall, the participants provided favourable feedback on the[AUTHOR NAME]

9class.

BRIEFING TO RMK12 IRON & STEEL TRAINING PROGRAMME (BATCH 11)
On 29th August 2022, the RMK-12 Iron andSteel Industry Training Programme Extensive began its 11th batch. Three steel
making companies have recently hired atotal of 38 new workers and request them tojoin this programme to benefit from thecustomised modules for iron and steel
industries.

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12STEEL NEWS1. Falling Prices and High Costs Eat Away at Steelmaker Margins
Date: 16 August 2022
Source:https://oilprice.com/Metals/Commodities/Falling-Prices-And-High-Costs-Eat-Away-AtSteelmaker-Margins.html
The Raw Steels Monthly Metals Index (MMI) fell by 8.73% from July to August. All in all, U.S. steel
prices continued their descent, leaving cold rolled coil and hot dipped galvanized prices at their lowest
point since January 2021. Meanwhile, hot rolled coil prices fell well beneath the $1,000/st mark,reaching their lowest point since December 2020. However, plate prices managed to disrupt twoconsecutive months of decline, by rising in July.

Source: https://agmetalminer.com/insights/
Correlation Declines: Record Spread Between HRC and Plate Steel Prices

Source: Chart & Correlation Analysis Tool, Insights[AUTHOR NAME]

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The spread between hot rolled coil and plate prices continues to expand. In fact, plate prices are now
double that of HRC, a historic record for the two steels. Prior to October 2020, plate prices sat an
average of roughly $150/st above HRC prices. Then, due to the relatively steep rise of HRC prices, thedelta inverted through November 2021. Now, as plate prices continue to hold near record levels andHRC prices remain if free-fall, the delta has expanded to $931/st.
Over the last few years, diverging price trends caused a major decline in the correlation between thetwo steels. After all, since 2012, HRC and plate prices enjoyed an 86.61% correlation. In fact, by the endof 2020, that correlation had grown to 87.17%. Since 2020, however, the price correlation has
plummeted to 55.93%.
Nucor Drops Plate Prices $120/St, Attempts to Raise HRC Prices $50/St
The growing spread triggered frustration from buyers. It even caused Nucor to lower plate prices by$120/st in late July. Then, following a month-over-month increase in July, prices began to decline again
in August. They now sit at their lowest point since November of 2021. That said, they appear to havelargely consolidated since last fall amid variable month-to-month price movements. It’s worth notingthat the current high prices do not come alongside historically elevated mill lead times. Traditionally,
this is a leading indicator of availability and demand.
Nucos also stated that additional plate capacity should come online in late 2022, which could add
further downward pressure to prices. Once operating at full capacity, Nucor Brandenburg will add anadditional 1 million short tons per year of steel plate.
Meanwhile, on August 8, Nucor announced a $50/st increase in sheet steel prices. Many experts feelthe move was an effort to pause the uninterrupted price descent for HRC, CRC, and HDG. The three
had been in a downtrend since late April, and it’s possible Nucor was hoping to shore up the bottom
end of the spread between HRC and plate steel prices.
That said, even the efforts of North America’s largest steelmaker seem incapable of stopping thecurrent declines. Indeed, HRC prices continue to deteriorate at the time of this writing. It’s also unlikelythat Nucor found any buyers at their elevated rate. Rather than accepting the increase, it’s likely
buyers simply leaned on inventories amid the growing weakness of the global economy.
Hot rolled coil prices now sit almost 57% beneath their all-time high and nearly 44% beneath their lateApril peak. Prior to the historic ascent that began in August 2020, the average HRC price since 2012 hassat at roughly $615/st. This could indicate that prices have further to fall, as they are technically still at
the top end of their historical trading range.

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Higher Input Costs Eat Away at Steelmaker Margins
On top of the descending price trends and deteriorating demand outlook, North American flat rolled
steel producers now face the pressure of increased input costs. In a recent conference call, Stelco CEO
Alan Kestenbaum referred to the combination of factors as a “double whammy” for production
margins.
Consumer Spending Increase
Meanwhile, consumer spending continues to show growth. While data for July awaits release, previousmonths reveal a rather steady increase. However, as the Wall Street Journal noted in its recent article,“Consumers Are Still Spending on Fun,” spending has shifted away from goods and towards
experiences, an inversion from pandemic-year trends.
However, food and electricity spending remains elevated. So as summer turns to fall, this could lead tomore widespread demand destruction. Beyond that, the National Association of Home Builders/Wells
Fargo Housing Market Index fell for the eighth consecutive month in August. In fact, the index droppedby 6 points to 49, signaling a contraction.
As a leading driver of steel demand, this recent decline could indicate the beginning of a moremeaningful downturn – one that steelmakers like Stelco simply have yet to see.

2. Steel Prices Drop Amid Dip
Date: 30 August 2022
Source: https://www.bangkokpost.com/business/2372838/steel-prices-drop-amid-demand-dip.
Global steel prices, which soared as a result of the Russia-Ukraine war, have declined following lower
demand for steel in China and an increase in steel imports into Asia from Russia, says the Federation ofThai Industries (FTI)
Price fluctuations have eased since June, with steel prices in the Asian market falling by 3.2-4.9% inJune and further declining by 5.2-16.3% in July, said Nava Chantanasurakon, chairman of the FTI's
Thailand Iron and Steel Industry Club,The decrease was attributed to China's zero-Covid policy, which led to the enforcement of lockdown
measures in cities where infections were reported.
This slowed down demand for steel in China, which declined by 6.9% to 501 million tonnes in the firsthalf of this year, said Mr Nava.
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Its steel product exports stood at 34.2 million tonnes in the same period. Most of them were sold at
low prices.
The other key factor has been an increase in the export of steel products from Russia to Asia, withRussia unable to sell to Europe in the wake of Western sanctions, said Mr Nava.
In Thailand, demand for steel products also fell by 13% year-on-year to 8.78 million tonnes in the firstsix months of 2022, mainly due to an investment slowdown in the construction sector and challenging
economic conditions.
These factors resulted in "very low" capacity utilisation in domestic steel manufacturing, which stoodat 33.3% amid higher prices for energy and raw materials, said Mr Nava.
"We expect global demand for steel to decrease this year because of the global economic slowdown,high inflation, Covid-19 outbreaks and the ongoing Russia-Ukraine war," he said.
Mr Nava urged the government to keep an eye on steel dumping in the Thai market and seriously
enforce anti-dumping measures.
He added that Thailand needs to stay alert to any suspected dumping as the country is not far
geographically from China and India, the world's largest and second largest steel producers,
respectively, with a combined production capacity of 1.2 billion tonnes a year, making up 62% of global
steel manufacturing.

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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 promote and develop thecompetitiveness, resilience and sustainability of the Malaysian Iron and steel industry; to provide advisory services and to carryout commission or promote the study of scientific, technology and economic aspects of iron and steel industry development in
Malaysia; and to promote iron and steel product standardization and utilization within Malaysia. For more information, please
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