MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA The Steel 2018 ISSUE 2 advocamalaysiasteelinstitute.comte Cover Story US Section 232 Steel Action and Article XXI of Gatt - Trade Remedy/Part 2 Highlights Industry 4WRD The National Policy on Industry 4.0 Women of Steel: Datin K. Talagavathi New Technology Governance Vital for Cross-Sector Benefits Sustainable Development of Iron and Steel Industry In the Era of Fourth Industrial Revolution At A Glance Types of Standards Steelmaking 102 Industry 4.0 for Iron and Steel Industry CONTENTS CEO’S 01 FOREWORD 2 US SECTION 232 STEEL ACTION AND ARTICLE XXI OF 02 GATT – TRADE REMEDY Part ll 3, 12 TYPES OF 03 STANDARDS 14 STEELMAKING 102: INTRODUCTION TO 04 IRONMAKING 16, 19 INDUSTRY 4WRD THE NATIONAL POLICY 05 ON INDUSTRY 4.0 20 Women of Steel 06 Y. BHG Datin K. Talagavathi 22, 23 INDUSTRY 4.0 FOR IRON AND 07 STEEL INDUSTRY 24, 25 NEW TECHNOLOGY GOVERNANCE VITAL FOR 27, 28 CROSS-SECTOR BENEFITS 08 SUSTAINABLE DEVELOPMENT OF IRON AND STEEL INDUSTRY IN THE ERA OF FOURTH INDUSTRIAL REVOLUTION 09 30, 32 DR. LEE KHAI ERN, NUR KHAIRLIDA MUHAMAD KHAIR INDUSTRY HIGHLIGHTS MODERN INTEGRATION 33, 34 TECHNOLOGY SDN BHD “MITEC” 10 MSI 35, 44 WITH YOU 11 MSI 45, 50 Bridging Gaps 12 MSI 51, 54 TrU 13 MSI 55 Others 14 MSI List of Events and 56 Activities 2019 15 CEO’s Jarrod Lim Chief Executive Officer FOREWORD Malaysia Steel institute (MSI) Welcome to MSI's 2nd Edition of Steel Advocate for It is indeed a definite transformation period for the 2018 and I do hope that you have enjoyed reading Iron & Steel industry to adapt to this new paradigm/ the newly improved 1st edition of Steel Advocate as philosophy but the question remains on the superlative well. The changes provided a fresher, clean look as we possible effort by the industry as a whole. How do stepped into the future with bigger motivation and Additive Manufacturing, Big Data, the Internet of Things, passion. At the same time, I would like to update on Simulation, Autonomous Robots, Cloud and etc., be the MSI initiatives where we have successfully completed basis for enterprise-wide innovation? during this 2nd half of 2018. It continues to be an interesting and challenging ordeal but the sharing is While new technologies are being developed, the steel worthy especially when it could stimulate a new hope industry has strived hard to make the world's strongest and ignite a fighting spirit should we all begin to work and most versatile material even better. Altogether, together as a team for the benefit of the industry. about 2000 grades of steel have been developed, of which 1500 grades are high-grade steels. There is still vast Currently, MSI is embarking on the lead role in uniting potential for new grades of steel with varying properties all the iron and steel industry players consisting from up, to develop and work on. Aside from that, the local steel middle and down streams, traders, users as well as the industry can heed MITI Secretary General’s suggestion natural resources players and re-cyclers in developing and venture into high value-added production sectors the White Paper for Malaysia’s Iron and Steel Industry. (medical device, automotive, high-grade steel etc.) to The White Paper is a private sector driven policy proposal further improve their bottom line and increase exports. preparation stage “From the industry, for the Industry” to build the roadmap for a sustainable Iron and Steel At Gebeng Industrial Area, Malaysia new steel player - industry which will act as an input in the National Policy Alliance Steel (M) Sdn Bhd invested RM 4.2 billion to IMP 4, projected to be implemented from 2021-2030. set up the country’s largest steel mill that produces The New Iron and Steel policy will take into consideration beam products, bar, and steel wire rod. Alliance Steel latest and future global developments and technology will definitely need to export most of its produces use, including shifting away from commodity-based and and assist Malaysia to have a better balance of steel to upgrade the value chain and many more, including trade rather than create a domestic pandemonium, factoring in industry 4.0 aspects. as for our local steel players, they must develop into a higher value-added player and continuously improve In October 2018, MITI launched the National Policy on its competitiveness. On the global arena, an easing of Industry 4.0 (also known as Industry 4WRD) which was the trade war between the US and China provided us led by MITI since 2017 together with several other main with much needed relief. Otherwise, further escalation ministries such as Ministry of Finance (MOF), Ministry may cause malaysia to become a dumping site of steel of Multimedia and Communications (KKMM), Ministry products when we do not want to see our country to be of Human Resources (MOHR) and more. The policy a hub for trade circumvention. was established in response to the call for a digital transformation of the manufacturing sector and its Moving forward, I hope that the entire Malaysia Iron related services. Industry 4.0 is referred to as production & Steel industry players collectively join MSI's as our or manufacturing based industries digitalization members and work together as one team to achieve transformation, driven by connected technologies. stronger competitiveness, higher resilience and Global digitalization has been on the rise since the last maintain the sustainability of the Malaysian decade, sweeping across the world, sending cautionary iron and steel industry. vibes that those who do not innovate, will diminish. 2 US SECTION 232 STEEL ACTION AND ARTICLE XXI OF GATT – TRADE REMEDY Part ll BACKGROUND In Part 1, we examined the imposition of tariffs of globally, and imposing specifically Section 301 on 25% on steel and 10% on aluminium by the US China on claim of violation of IP rights has escalated US- under Section 232 of the Trade Expansion Act 1962 China trade relations to “tit-for-tat” retaliatory actions (as amended) based on security reason; the WTO by both the US and China. It is envisaged if this is pro- provisions under Article XXI of GATT 1994 (Security longed, the so called “trade war” may become a reality? Exceptions), the Section 232 investigation procedure, the details of the report that recommended for the Here we will try and examine compilation of views, trade action and the final decision by the President the latest updates after the imposition of tariff under of the US to impose the tariffs on 23 March 2018. Section 232 and Section 301, including further reactions of interested parties, impact on businesses, Since then the initiation of investigation by the US mitigating actions of the effects of trade actions by under Section 232 on autos and auto parts applied various countries. 3 -Products: steel and STATUS OF US Section 232 Tariffs on aluminium products, Steel – Chronology bourbon whiskey, SECTION 232 of Actions motorcycles, tobacco products, pleasure boats, ACTION ON • 23 March 2018 - US imposed and other products; and tariffs of 25% on steel and 10% Additional duties planned STEEL AND on aluminium. to be imposed at 10 to 50% • Exempted Countries: Tariff of equivalent to $4.2 billion from ALUMINIUM 25% imposed on selected iron 1 June, 2021: & steel products on all countries, -Products: cranberries, except: denim jeans, footwear, washing machines, and √ South Korea, Brazil, and other items. Argentina (agreed to quotas); ◊ Turkey: 4 to 70% additional √ Australia (exempted without duties equivalent to $1.8 billion any conditions); and from 1 June 2018: √ South Africa given exemption -Products: foodstuffs, paper, on 16 steel products and 161 plastic, structural steel, aluminium products on 24 machinery, vehicles, and other products]. Additional October 2018. list to be announced. • Form of Retaliatory Actions ◊ India: 4 to 100% additional Against the US: Some countries duties equivalent to $10.6 in response to this 25% tariff billion from 1 June 2018: imposition on selected iron & -Products: nuts, apples, steel products have resorted to steel products, motorcycles, and other products; taking retaliatory action against ◊ Mexico: 7 to 25% additional the US: duties equivalent to $3.6 billion √ by imposing increase in in two tranches on 5 June 2018 tariffs on selected products and 5 July 2018: (not confined to iron & steel -Products: pork, apples, products); and potatoes, bourbon, cheeses, √ the trade value equivalent to and other products. the trade value affected by the ◊ Canada: 10 to 25% 25% tariff imposed by the US. additional duties equivalent to • Retaliatory Actions by Countries: $12.7 billion from 1 July 2018: The countries that have come -Products: steel, aluminium, coffee, ketchup, orange out with retaliatory lists against juice, paper products, and the US are: other consumer goods. √ Canada; China, the EU; India; ◊ Russia: First tranche at Japan (not earlier than 23 25-40% additional duties, March 2021); Mexico, Russia, equivalent value of $87.6 Switzerland (only has requested million announced on 6 July for consultations) and Turkey. 2018: Based on available data: -Products: road ◊ China: 15 to 25% additional construction equipment, oil and gas equipment, tools duties equivalent to $3.0 billion and other products; and effective 2 April 2018: Second tranche of $450 -Products: fruits, vegetables, wine, meats, steel products, million to be imposed from aluminium waste, and 21 March 2021. other products. -Products: To be confirmed. ◊ The EU: 10 to 25% additional duties on $3.2 billion in U.S. goods effective 22 June 2018: 4 • Referred to WTO Dispute doubled from 25% to 50% for stainless steel. (From 18 May till 15 August steel only.