Posted on 15 Oct 2025
THE unveiling of the Steel Industry Roadmap 2035 (SIR 2035) last week comes at a critical time for the iron and steel industry, which has long struggled with overcapacity and fierce competition, leading many players to incur financial losses.
The SIR 2035 was launched by Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Aziz at the Asean Policymakers Conference on Steel and the 2025 Asean Iron and Steel Forum, where he outlined a comprehensive plan for the sector comprising 15 strategies that will take place in three phases, with the aim to turn the industry into an economically and environmentally sustainable one.
Industry applauds Steel Industry Roadmap 2035, says execution critical for success
By Esther Lee / The Edge Malaysia
14 Oct 2025, 03:00 pm
Zafrul: The SIR 2035 is not only a policy document but also a national contract for our sustainable future . (Photo by Sam Fong/The Edge)
This article first appeared in The Edge Malaysia Weekly on October 6, 2025 - October 12, 2025
THE unveiling of the Steel Industry Roadmap 2035 (SIR 2035) last week comes at a critical time for the iron and steel industry, which has long struggled with overcapacity and fierce competition, leading many players to incur financial losses.
The SIR 2035 was launched by Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Aziz at the Asean Policymakers Conference on Steel and the 2025 Asean Iron and Steel Forum, where he outlined a comprehensive plan for the sector comprising 15 strategies that will take place in three phases, with the aim to turn the industry into an economically and environmentally sustainable one.
“The SIR 2035 is not only a policy document but also a national contract for our sustainable future, as well as future generations’ socioeconomic well-being and resilience,” Zafrul said during the unveiling.
The initial feedback from the industry has been positive, with Malaysia Steel Association (MSA) vice-president and treasurer Datuk Seri Tai Hean Leng calling it an “accurate and comprehensive” roadmap.
“The SIR 2035 couldn’t have been completed at a more pivotal juncture, as most major Malaysian steel mills are in critical financial distress,” Tai, who is also CEO of Malaysia Steel Works (KL) Bhd (KL:MASTEEL), tells The Edge.
Malaysian Iron and Steel Industry Federation (Misif) president Roshan M Abdullah agrees that the roadmap is a comprehensive reform blueprint for the sector, well aligned with both the New Industrial Master Plan (NIMP) 2030 and the National Energy Transition Roadmap (NETR) 2050.
“It details measures to tackle structural issues to ensure the iron and steel sector is resilient, competitive, sustainable and environmentally responsible. The time invested to develop this roadmap reaffirms Miti’s dedication and commitment to the iron and steel sector, to which we are grateful,” says Roshan, who is also CEO of Mycron Steel Bhd (KL:MYCRON).
While he believes the roadmap provides clear actionable strategies and measurable goals, he says Misif, which represents the entire value chain of the iron and steel industry, is in the midst of compiling feedback from its members on whether it adequately addresses and provides solutions for the entire steel value chain.
Notably, the roadmap follows years of white papers aimed at reforming the industry that went unheeded. In the near term, the SIR 2035 focuses on addressing structural and environmental risks that threaten the industry’s viability.
The roadmap outlines measures such as implementing a targeted moratorium to control industry oversupply; restructuring manufacturing licences — including renegotiating existing licences and withdrawing dormant ones; cracking down on illegal scrap exports, unlicensed steel players and import dumping; as well as providing a clear, focused pathway for sector decarbonisation.
These steps will greatly support an industry in which domestic production of long products has increased by two-thirds, from 3.6 million tonnes to 6.2 million tonnes between 2017 and 2023, while flat product output declined by one-third to 2.2 million tonnes over the same period.
Total potential upstream capacity could double by 2030, based on current approved and planned projects. If left unaddressed, the roadmap warns, overcapacity may worsen, further undermining the industry’s economic sustainability and deterring investment.
In 2023, the industry’s capacity utilisation rate stood at a low 39.1%, well below the global average of 75%.
While domestic long product output increased, demand for these products fell about 20% between 2017 and 2023. Demand for flat products declined 10% over the same period, yet domestic output remained below local demand.
In the medium term, the focus will be on making the iron and steel industry more attractive for investment, supporting its transition up the value chain and towards a low-carbon future. A key priority is the introduction of a carbon tax mechanism in 2026 to establish a level-playing field.
“The main highlights of the SIR 2035 will be able to address the excessive overcapacity and greenhouse gas (GHG) emissions that have plagued the steel industry for many years by selective manufacturing licence restrictions and rewarding green low GHG emissions steel production by carbon pricing and carbon competitive funds,” says Tai.
“The restarting of the national standard on low carbon and green steel under the purview of Sirim, which had been stalled since September 2024, is essential, as the standard is one of the vital enablers of the SIR 2035.”
The long-term goal is to fully transition the Malaysian iron and steel industry into a green steel ecosystem. According to the roadmap, achieving long-term success will depend on Malaysia’s ability to build a strong industrial base for green steel, supported by international partnerships, blended financing and ongoing innovation.
Industry players emphasise that, ultimately, the roadmap’s success hinges on effective execution. “Execution will be the key,” says Roshan, adding that Misif is committed to working with the government to achieve the roadmap’s goals and desired outcomes.
Similarly, MSA’s Tai says seamless coordination between ministries and agencies is essential for the successful implementation of the SIR 2035.
Roshan adds that execution will be a key challenge in implementing the roadmap, stressing that its success depends on fair and consistent policy enforcement, avoiding reforms that unintentionally hinder industry growth, and ensuring new measures — such as carbon requirements — are backed by adequate infrastructure and financing.
“It will also be important to avoid placing excessive compliance burdens on companies too quickly. Ultimately, the roadmap must strike a balance between ambition and practicality, with transparent and inclusive implementation to deliver lasting benefits for the industry,” he says.
Source:The Edge
