Malaysia's future steel demand growth is highly uncertain

According to relevant data, although Malaysia's annual steel consumption is not high, the country has a large steel industry. According to the statistics of MISIF (Malaysian Iron & Steel Industry Federation) in 2022, the construction industry accounts for about 63% of Malaysia's overall steel demand, the metal processing industry accounts for about 11%, the electronic and Semiconductor industry accounts for about 9%, and the automobile industry accounts for about 8%.

The construction industry has the largest demand for steel. Thanks to foreign investment and local demand, as well as the country's participation in many infrastructure construction projects such as the "the Belt and Road" since 2014, Malaysia's construction industry has developed rapidly from 2010 to 2017. However, since 2018, Malaysian political parties have been rotating, multiple infrastructure construction projects have been suspended, and the local residential construction market has been in a state of oversupply, leading to a contraction in construction investment and a contraction in the country's construction industry. From 2019 to 2021, the annual growth rates of Malaysia's construction industry were 0.4%, -19.4%, and -1.7%, respectively, with the residential construction industry experiencing a greater decline than the government's public construction industry.

Statistical data shows that although Malaysia's automotive, machinery, electronics and other industries recovered in 2021, investment growth was not as expected due to the uncertainty of the country's political situation, and domestic demand has not fully recovered due to the impact of the epidemic, resulting in increased export dependence. Therefore, the uncertainty regarding the future growth of the country's "steel demand" remains high.