Exports of scrap iron and steel have been temporarily barred in Sabah, Malaysia, in an effort to ensure that the domestic industry has adequate raw material since the country does not mine iron ore.
Datuk Seri Hajiji Haji Noor, the chief minister noted that the cabinet’s decision was due to a severe shortage of raw materials for billet and rebar production in the state. He added that rectifying the shortage would aid in stabilizing rebar price and construction costs. Copper, aluminum and stainless-steel scrap exports are exempted from the ban.
Hajiji stated that an adequate raw material supply would increase investment and thus increase production capacity from 8,000mt to 18,000mt monthly. The billet mills would also have room to expand operations to produce wire rods, which would require an RM40mn ($9.7mn) investment and also add a RM20mn mill on the East Coast.
The ban is in line with Sabah’s industrial policy to stimulate high value-added downstream processing activities. Hajiji said that he plans to implement a RM200/mt sales tax on scrap iron exports before lifting the ban.