International Steel Market Daily: Overcapacity Issues Highlight Malaysia’s Suspension Of Issuing Steel Production Licenses

In recent years, Malaysia’s steel production capacity has continued to grow, but its demand growth has significantly slowed down, and the industry is in a state of overcapacity. According to data released by the World Iron and Steel Association, Malaysia’s crude steel production capacity in 2022 was approximately 17 million tons, with a consumption of only 7.5 million tons. The pressure on production capacity of steel products such as threaded steel, construction wire rods, and cold rolling is increasing. On November 14th, Liu Zhendong, Deputy Minister of Investment, Trade and Industry (MITI) of Malaysia, stated that in order to reassess and address the challenges faced by the local steel industry, the department has decided to issue a steel investment suspension order, which will take effect on August 15, 2023, for a period of two years.
This suspension order covers all inquiries, evaluation of existing applications, new applications, license transfers, extensions, regularization and diversification procedures for manufacturing licenses, as well as the issuance of production licenses (ICA10) for manufacturing activities in the steel industry (including non-ferrous metal recycling activities) in accordance with Article 156 of the Industrial Coordination Act 1975. If the relevant license meets the vision of the “New Industrial Master Plan 2030” (NIMP 2030), special approval can be applied for, such as high value-added complex steel product production projects, equipped with low-carbon/carbon reduction technologies such as carbon capture, utilization, and storage (CCUS).