DECEMBER 2020

THE STEELNOTICEBOARD

BILLETREBARSTEEL WIRE ROD

RM2406

RM2388

RM2475SCRAP

IRON ORE

RM1760

RM651

TRADE PERFORMANCE
Malaysia Trade Performance, January-November 2020
Malaysia’s Iron and Steel trade value in November 2020 was recorded at RM 4.0 billion, a decrease of 19.7 percent compared toNovember 2019. However, the trade balance has slightly widened by 22.8 percent from trade deficit of RM 0.11 billion in 2019 totrade deficit of RM 0.14 billion in 2020.
From January to November 2020, the trade value stood
Trade Performance of Iron & Steel Industry
at RM43.6 billion compared to RM48.5 billion in the same
Nov 2020 :period of 2019, a reduction of 10.2 percent. However,RM 4.0 billion
Trade Value
19.7% M-o-M change
Nov 2019 :significant improvement on the trade balance from trade
RM 5.0 billion
deficit of RM8.6 billion in January to November 2019 to
Nov 2020 :Nov 2020
Nov 2019
trade deficit of RM 0.7 billion during the same period of(RM 0.14(RM 0.14 billion)(RM 0.11 billion)
2020 due to higher export of long steel products to China.
billion)Balance ofTrade Deficit
Trade Deficit
Nov 2019 :Trade
From January to November 2020, Malaysia’s export of the(RM 0.11
iron and steel products to China alone recorded at RM 8.9billion)billion. Being the Malaysia’s main export destination,
Jan-Nov 2020:
China import has been strong despite rising international
RM 43.6 billion
Trade Value
10.2% Y-o-Y change
Jan-Nov 2019:prices of the steel products after the resurgence of
RM 48.5 billion
China’s economy post COVID-19 lock down. Prices of
Jan-Nov 2020
Jan-Nov 2019billet, rebar and steel wire rod continue upward(RM 0.7 billion)(RM 8.6 billion)
Jan-Nov
2020:
momentum, supported by soaring iron ore price. Iron ore,
Trade Deficit
Trade Deficit(RM 0.7 billion)
Balance of
which is one of the main raw materials for steelmaking
Jan-Nov 2019 :Tradehave increased more than double since February 2020,(RM 8.6 billion)
which made the Government of China called for theirsteel industry players to reduce crude steel output toimprove the supply and demand situation.
Data Source: MSI/MATRADE/DOSM

MSI WITH YOU
ANNOUNCEMENT OF THE REVISED IRON AND STEEL POLICY
The Announcement of The Revised Iron and Steel
Policy chaired by Dato' Sri Norazman Ayob Deputy
Secretary General (Industry) MITI on 21 December
2020. The revised policy seeks to balance thesustainable development of the domestic Iron andSteel industry and the promotion of international
trade and investments particularly against thecurrent global economic developments. The
revision was based on the White Paper by Iron &Steel industry: The Roadmap Back to Regional
Competitiveness 2021 – 2030 where MSI was the secretariat during the preparation process.
The announcement meeting was attended by Malaysia Steel Association (MSA), Malaysia Iron and Steel Industry Federation(MISIF), Steel Wire Association of Malaysia (SWAM), Federation of Malaysian Manufacturers (FMM), Malaysia Steel & Metal
Distributors' Association (MSMDA) and Federation of Malaysia Hardware, Machinery & Building Materials Dealers' Association(FMHMBA).

6TH ASEAN-OECD GOOD REGULATORY PRACTICE NETWORK (GRPN) MEETING
On 1 December 2020, MSI participated in the final series of the 6th ASEANOECD Good Regulatory Practice Network (GRPN) Meeting which were held
via zoom. The event was hosted by the office of Government of Vietnam andco-chaired by Ministry of International Trade (MITI) and New Zealand’s
Ministry of Business, Innovation and Employment. It discussed on how
better regulations can support Covid-19 recovery and solutions to help
prepare for future crisis, such as international regulatory cooperation orreviewing policies made during the crisis.

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GENERAL OUTLOOK OF THE BUDGET 2021 FOR MALAYSIA’S ECONOMY
On 2 December 2020 MSI joined the e-Forum “General Outlook of the Budget 2021 for Malaysia’s Economy.” Four prominent
speakers included Mr. John Mahmood Merican, Ministry of Finance, Malaysia; Dr. Muhammad Abdul Khalid, Institute of
Malaysian and International Studies, UKM; Mr. Yew KeatChong, The World Bank, Malaysia; and Prof. Dr. Jomo Kwame
Sundaram, Pominant Malaysian Economist. The e-Forum wasmoderated by Datuk P. Ravidran. The forum besides the
speakers’ frank and informative presentations saw active
participation of the online participants.
Discussions topics among others covered balance related topeople’s well-being, business community and economic
resilience including on immediate and long-term effects; EPF
withdrawal; coverage of informal sector; allocation based oncommunities and constraints faced and accountability.

VIRTUAL ROUNDTABLE ON STAKEHOLDER’S ENGAGEMENT TO ADDRESS MARINE LITTER IN
MALAYSIA THROUGH A POLICY FRAMEWORKOn 21 December 2020, MSI attended a
webinar titled: Virtual Roundtable on
Stakeholder’s Engagement to Address
Marine Litter in Malaysia through a Policy
Framework. The webinar addressed on
pollution issues caused by usage ofplastics in the marine industry and ways
to overcome in the Southeast Asian andEast Asia region.

MSI STANDBY AT SESI PERBAHASAN BELANJAWAN 2021 PERINGKAT JAWATANKUASA BAGIKEMENTERIAN PERDAGANGAN ANTARABANGSA DAN INDUSTRI DI PARLIAMENT

MSI provided inputs and justification on our New Development Programme i.e Program Latihan Besi dan Keluli under RMKE-12,
a five-year programme to develop competent talent to work in Iron and Steel industry. The Belanjawan 2021 for MITI wasapproved at Peringkat Jawantankuasa.

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SPECIAL PRESENTATION ON NATIONAL METROLOGY INSTITUTE OF MALAYSIA (NMIM)
National Metrology Institute of Malaysia (NMIM) is one of the agencies
under MITI. This special presentation is to introduce NMIM and the
National Metrology Infrastructure functions that emphasis on ensuring
the harmonisation of measurement and calibration activities in the
country. Also, how it uplifts the quality of local products and services tocontribute to enhancing the productivity and growth of Malaysianindustries that aim to ensure a fair, safe, health and competitive Malaysia
in sustaining the current investments as well as attract new investments.

RADIO INTERVIEW WITH SELANGOR FM
MSI attended a radio interview with Selangor FM on 23 December 2020. Theinterview discussed the role and function of MSI under the Ministry ofInternational Trade and Industry (MITI) and how MSI support the mission andvision of MITI and further strengthen the economy sectors in Malaysia. Theinterview also highlighted on the main challenges faced by MSI andappropriate measures taken to ensure continuous services given to the steel
industry during this pandemic. Our message to the ‘rakyat’ is to utilise theservices from the government and buy local made products to ensure usageof maximum capacity and increase local employment. Anyone who isinterested to know about MSI may contact the agency.

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MSI BRIDGING GAPSENGAGEMENT SESSION FOR SHIPBUILDING
On 23 December 2020, MSI organised an Engagement Session on Shipbuilding. This engagement session aimed to assists how
local steel suppliers cater to the local requirements of the shipping companies and to develop the products to be morecompetitive. This session was chaired by Mr. Lim Keng Yow, Chief Executive Officer of MSI and presented by 3 panellists asfollows:
1) Mr Ng Kian Hin, Director-Group Business Development Government Admin and Project Division, Ji Kang Dimensi Sdn Bhd
2) Ir. Sabrudin Suren, Senior Manager, Oriental Shield Sdn Bhd
3) En. Muhammad Fahmi Ismail, Secretary General, Association of Marine Industries of Malaysia (AMIM)
Iron and steel industry in Malaysia was liberalized in 2009. Steel makers constantly find new ways to be competitive in steel
making process and improve their plant condition. MSI work closely with all sectors such as construction, industrial sites andautomotive to encourage them to use local content. MSI will work closely with the steel mills to develop their talents.

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MSI TRU
ERIA-UNCTAD JOINT WEBINAR ON NON-TARIFF MEASURES (NTMS) IN EAST ASIA
On 8 December 2020, MSI participated in
the above webinar. There were 3 speakers
and experts called in during Q&A to sharefurther views. Some main areas covered
included a quick overview of International
Classifications of NTMs, guidelines and theavailability of NTMS, Analysis of NTMs by
country and type, prevalence of NTMs on
Import and export on traded products.
Some take away include:• Technicalmeasuresmore
frequently used than SPS measures;• NTMs are needed to protect
consumers (quality, safety) and environment and address market failures but need a balance to avoid cost burden;• For future direction, noted that evidence/database by itself is not sufficient – need to work towards making theseinformation users friendly, especially for the benefit of SMEs that do not have the time to be able to use these data
to know the impact of the NTMs;• Noted during Q&A that in ASEAN from year 2000 to current the tariffs have halved but the NTMs have increased bythree times. Most of the NTMs in ASEAN were in the form of non-automatic import licenses imposed on imports.
Information on NTMs can be accessed at the UNCTAD-TRAINS database.

TAKLIMAT PERSEDIAAN PROJEK BAGI ROLLING
PLAN 1 TAHUN 2021 (RP 1 2021) RANCANGANMALAYSIA KE-12 (RMKE-12)
On 18 December 2020, MSI attended "Taklimat Persediaan Projek
bagi Rolling Plan 1 Tahun 2021 (RP 1 2021) Rancangan Malaysia ke12 (RMKe-12)". The briefing was organised through webex to give
explanation on how to use myProject for Project Owner.

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6BENGKEL PENYELARASAN PROGRAM RESKILLING DAN UPSKILLING MITI & AGENSI BAWAH
INISIATIF PENJANA
On 23 December 2020, MSI presented our programme Enhanced Employability of Unemployed Workers and New Graduates in
The Iron and Steel Industry in Bengkel Penyelarasan Program Reskilling dan Upskilling MITI & Agensi bawah Inisiatif PENJANA.

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EVENTS HIGHLIGHT[AUTHOR NAME]

8STEEL NEWS
1. MITI imposes anti-dumping duties on products from China, South Korea, Vietnam
KUALA LUMPUR, Dec 23 -- The government has decided to impose
definitive anti-dumping duties on the importation of flat rolled productof non-alloy steel-plated or coated with aluminium and zinc, says the
Ministry of International Trade and Industry (MITI).
In a statement today, MITI said the duties will be applied to the said
products imported from China, South Korea and Vietnam for a period offive years, beginning Dec 12, 2020 until Dec 11, 2025.
The duties for products imported from China will range from 2.18 percent to 18.88 per cent, while the duties for products from South Korea
will be from 9.98 per cent to 34.94 per cent, and products from Vietnam
will be charged from 3.06 per cent to 37.14 per cent.
It said the decision was made after MITI had conducted and completed a detailed investigation on producers and importers in
Malaysia, as well as producers and exporters of the said merchandise from the three countries.
"The government has concluded the final determination of the anti-dumping investigation and found that the subject merchandise
is being imported into Malaysia at a price lower than the selling price in the alleged countries, causing material injury to thedomestic industry in Malaysia," the ministry said.
It said the investigation was done in accordance with the Countervailing and Anti-Dumping Duties Act 1993 and Countervailingand Anti-Dumping Duties Regulation 1994, based on a petition filed by NS Bluescope (Malaysia) Sdn Bhd on behalf of the domestic
industry.
MITI said the Royal Malaysian Customs Department will enforce the collection of anti-dumping duties, adding that the move is
expected to address the issue of unfair trade practices.

2. China’s crackdown on Australian coking coal hurts its steel industry
China’s unofficial restrictions on coal imports from Australia are having
more than just an impact on miners down under, it’s hurting steel
producers in China and helping those elsewhere.
Sign Up for the Energy Digest
Chinese authorities have now more or less confirmed what the market
already knew, namely that they have placed what amounts to severe
curbs on imports from Australia, the world’s largest exporter of coking
coal used to make steel, and the second-biggest shipper of thermal coalused in power plants.
Ships carrying a total of 6.84 million tonnes of Australian coal are now
waiting to discharge at Chinese ports
A Chinese foreign ministry spokesman indicated on Wednesday that “many” Australian coal shipments have “failed to meetenvironmental standards”.
It would be a challenge to find anybody in the coal industry who believes environmental standards are the real reason for China
placing an effective ban on coal imports from Australia, but at least the spokesman has circuitously confirmed that the restrictions
are indeed in place.
Since the unofficial ban was enacted in October, shipments from Australia have plunged, with Chinese imports of coking coal from
Australia falling to 1.53 million tonnes in October, or about 26% of its total imports of the fuel. That compared to a share of 30%
in September and 78% in March, the highest level since at least 2018, according to Reuters’ calculations based on data customs
data.

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9The situation for November looks even direr, with only seven cargoes from Australia, totaling 744,000 tonnes, being discharged
at Chinese ports by Nov. 25, according to vessel-tracking and port data compiled by Refinitiv. Of these, four are likely coking coal,with the remaining three being thermal cargoes.
However, the data also shows that 69 ships carrying a total of 6.84 million tonnes of Australian coal are now waiting to discharge
at Chinese ports, with 34 vessels having arrived in Chinese waters this month. The spat with China is now showing up in Australiancoal exports, which were estimated at just 18.4 million tonnes in the first 25 days of November, down from 27.98 million in
October, and well below the best month so far in 2020, which saw 32.7 million tonnes exported in June.
Prices diverge
The Chinese restrictions have hit the price of Australian coking coal, with contracts on the Singapore Exchange ending at $101.57
a tonne on Wednesday, the weakest since July 2016 and down some 27% from the recent peak on Oct. 5, and some 37.3% below
the high so far this year, reached in early March. While Australian coking coal prices have been plunging, the opposite is true for
their Chinese equivalent, the Dalian Commodity Exchange contract, which ended at 1,391.5 yuan ($211.80) a tonne on
Wednesday.
The contract is up 13.5% from late September and is also some 38.5% above the low for the year so far, reached at the end of
April while much of China’s economy was still locked down as part of efforts to combat the coronavirus pandemic. Australia
dominates the global seaborne coking coal market, with the only meaningful competitors being the United States and Canada.
The price for U.S. coking coal at Hampton Roads port in Virginia, as assessed by commodity price reporting agency Argus, ended
at $120 a tonne on Wednesday, up 12.1% from its recent low of $107 on Oct. 27. Traders report that there is increased Chineseinterest in buying U.S. coking coal in the first quarter of next year, and substantial premiums are being offered to secure cargoes.
What does appear certain is that Beijing’s spat with Canberra is likely to translate into higher costs for China’s vast steel sector.
While China, the world’s biggest producer and consumer of steel, may be able to replace Australian coking coal with a combinationof higher domestic output and increased imports from neighbouring Mongolia, as well as from the United States, Canada andRussia, it will come at a price.
At the same time China’s regional competitors in the steel market, such as Japan, South Korea and India, will enjoy the windfall ofcheaper Australian supplies. While there is limited competition among these nations for steel exports to other countries in Asia,
it’s also fair to say that China’s steel mills will see margins contract, especially since iron ore costs have been rising as well.
(Editing by Himani Sarkar)

3. Nippon Steel and ArcelorMittal plot Indian expansion blitz
TOKYO -- Nippon Steel and ArcelorMittal will more thandouble the steel production capacity of their Indiansubsidiary to 23 million tons a year by the 2030s, looking
to expand their foothold in a promising market.
The expansion plan, involving fresh investments andacquisitions, far outstrips an increase to between 12
million tons and 15 million tons that the two steelmakers
cited when they acquired Essar Steel India late last year.
The company, since renamed AM/NS India, currently can
produce about 9.6 million tons of steel products a year.
The partners envision a larger share of a national market
that is catching up with China as a global driver of theindustry. Nippon Steel forecasts Indian demand for steel products swelling to 230 million tons a year by the 2030s, or 2.3 times
the current level, and aims to boost capacity to at least 10% of that figure.
The two companies spent roughly $7 billion on the Essar acquisition, with ArcelorMittal holding a 60% stake and Nippon Steel
40%. The subsidiary ranks as India's No. 4 steelmaker with a share seen at less than 10%, behind Tata Steel, JSW Steel and Steel
Authority of India.

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10Though details of the investment plan have yet to be hammered out, it likely will include building and expanding blast and oxygen
furnaces as well as a coke oven at the main AM/NS India steelworks in Gujarat. Boosting capacity for both crude steel production
and downstream processing will increase overall output of steel products.
Acquisitions are in the cards as well. AM/NS India in July purchased Odisha Slurry Pipeline Infrastructure, which manages andoperates a pipeline used to transport iron ore, enabling Indian ore to be shipped efficiently to coastal areas. The company was
originally under the umbrella of the former Essar but was sold amid the steelmaker's financial difficulties.
The reacquisition "was a necessary investment to return its business infrastructure to the way it should be," said a representativefrom Nippon Steel's global business development sector.
Though India's steel market was dealt a blow by the coronavirus pandemic, it has rebounded quickly. Crude steel output plunged
more than 60% on the year in April amid a nationwide lockdown, but ticked up 1% to 9.06 million tons in October, the first increasein eight months.
Shaktikanta Das, governor of the Reserve Bank of India, on Thursday noted a "stronger than expected" pickup in economic activity.
Other steelmakers also are investing more aggressively in the Indian market. JSW said in October that it would spend about 15
billion rupees ($203 million), including payments to creditors, to acquire Asian Colour Coated Ispat, a local producer of steel sheet.
India churned out 111.2 million tons of crude steel last year, an 80% increase over a decade. U.K.-based consultancy Wood
Mackenzie anticipates continued growth in demand there over the medium to long term, even while steel consumption in China
and other markets declines as infrastructure investment runs its course.
India is particularly crucial to Nippon Steel. Demand looks certain to shrink in its home market of Japan, and the steelmaker faces
intense competition with Chinese rivals abroad. The company forecasts a net loss of 170 billion yen ($1.63 billion) for the fiscal
year ending in March, due largely to the coronavirus pandemic.
Though the company has steelworks elsewhere in the world, including in Brazil and Sweden, India accounts for half its overseas
crude steel production capacity.
Nippon Steel will need to get on the same page as ArcelorMittal regarding the details of their plans there, but Atsushi Yamaguchi
of SMBC Nikko Securities sees benefits to the partnership.
"Teaming with ArcelorMittal will enable it to take proactive measures such as investing," Yamaguchi said.
There are potential instabilities that could complicate its plans.
These include the risk of New Delhi changing key policies or imposing new regulations. The former Essar fell prey to this when it
invested in a new plant after the government guaranteed a steady supply of natural gas, only for this supply to be curtailed later,slashing the facility's capacity usage to just 35% and contributing to the company's financial deterioration.
The acquisition of Essar itself took nearly two years due to a court battle over how to prioritize payouts to creditors.
Companies in the steel industry, a major source of greenhouse gases, also may face headwinds from efforts to combat climatechange, as India has ratified the Paris Agreement on climate.

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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 standardisation and utilisation within Malaysia. For more information, please
visit www.malaysiasteelinstitute.com and follow us on Facebook, Twitter, LinkedIn and YouTube channel.
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MALAYSIA STEEL INSTITUTE
Level 26, Menara MITI
No. 7, Jalan Sultan Haji Ahmad Shah
50480 Kuala Lumpur

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