When steel guru's diehard followers get pissed off and go crazy with the falling price, great opportunity has surfaced.

Mr Ooi Teik Bee,

Can I have your FA reports and research materials on Lionind, Masteel and Ssteel?

My email address is soonadol1@gmail.com

Thanks in advance.

Hope bro Edward can share with us about the recent development of rebar business and price.

Bro leoting, are you still with us?

https://www.platts.com/latest-news/metals/london/graphite-electrode-shortage-could-impact-steelmaking-21582232

Bro Edward and leoting, Annjoo quarter report mentioned about the shortage of graphite electrodes worldwide will affect electric arc furnace operators. What is this material used for? Will it affect other Malaysia steel miller?

Bro Up_down, glad to see you again.

Bro Edward, what chain reaction will impact us?

Price surges must have drove them crazy.

Steel manufacturers to challenge safeguard duty in court
TheEdgeMon, Aug 07, 2017 - 4 hours ago

KUALA LUMPUR: The Steel Wire Association of Malaysia (SWAM) has obtained leave to pursue a court challenge against safeguard duties imposed by the international trade and industry ministry (Miti) on imported steel wire rods (SWR) and deformed bar in coils (DBIC).

Granted by the Kuala Lumpur High Court last week, the leave paves the way for the association to seek a court order to quash the safeguard duty, people familiar with the matter told The Edge Financial Daily.

The judicial review is only for the safeguard duties for SWR and DBIC, which was announced on April 13. The proceedings do not involve safeguard duties on imported steel concrete reinforcing bar (rebar) which was also announced on the same day.

It is learnt that the proceedings involve SWAM and Miti. The Malaysian Steel Association (MSA), whose petitions last year initiated the safeguard investigations that culminated in the safeguard duties, had applied to be part of the proceedings.

Rebar is mainly used for construction activities in Malaysia whereas SWR and DBIC are used by downstream steel manufacturers — many of whom are SWAM members — to produce steel wire mesh, fending and fasteners such as nuts, bolts and nails.

The duties for SWR and DBIC begin at 13.9% for the year up to April 14, 2018, then 12.9% and 11.9% respectively for the subsequent two years. Meanwhile for rebar, imports are slapped with a 13.42% import duty for 12 months up to April 13, 2018, followed by 12.27% and 11.1% each for the subsequent two years.

To recap, Miti had imposed the two duties after concluding two parallel safeguard investigations, which it initiated following safeguard petitions by the MSA in June 2016.

During the three-year period of safeguard duties, the petitioners would have to implement the individual adjustment plans submitted alongside their petitions. While plans vary, the steel mills had generally aimed to boost efficiency and productivity by improving processes and investing in plant upgrades and modifications, among others.

“During the implementation phase, the government reserves the right to review and make changes to the safeguard measures after taking into consideration various circumstances such as the adjustment plan,” Miti told The Edge Malaysia weekly last April when asked about the adjustment plan.

The MSA petitioners are Ann Joo Steel Bhd, Southern Steel Bhd, Malaysia Steel Works (KL) Bhd as well as Lion Industries Corp Bhd’s subsidiaries Amsteel Mills Sdn Bhd and Antara Steel Mills Sdn Bhd.

They had claimed that the domestic producers of rebar, SWR and DBIC were substantially hurt by surging imports between Oct 1, 2012, and Sept 30, 2015, which caused them to lose market share, downsize workforce and scale back operations.

Collectively, the participating steel mills account for 73.4% of local rebar output and 100% of local SWR and DBIC production.

The petitions were strongly objected to by various steel industry players who use the three steel products as raw materials because the additional duties would increase their procurement costs, hurting profit margins.

For rebar, the objecting players had included the Master Builders Association Malaysia and the Malay Contractors Association Malaysia.

Meanwhile, SWAM — whose members include public-listed manufacturers such as Chin Well Holdings Bhd, Engtex Group Bhd, Leader Steel Holdings Bhd and YKGI Holdings Bhd — had raised concerns over the safeguard petition for SWR and DBIC.

“During the investigations, the government assessed the issues and concerns submitted by all interested parties in accordance with the Safeguards Act 2006 and Safeguards Regulations 2007,” said Miti when announcing the imposition of the safeguard duties in April.

Steel manufacturers to challenge safeguard duty in court
TheEdgeMon, Aug 07, 2017 - 4 hours ago

KUALA LUMPUR: The Steel Wire Association of Malaysia (SWAM) has obtained leave to pursue a court challenge against safeguard duties imposed by the international trade and industry ministry (Miti) on imported steel wire rods (SWR) and deformed bar in coils (DBIC).

Granted by the Kuala Lumpur High Court last week, the leave paves the way for the association to seek a court order to quash the safeguard duty, people familiar with the matter told The Edge Financial Daily.

The judicial review is only for the safeguard duties for SWR and DBIC, which was announced on April 13. The proceedings do not involve safeguard duties on imported steel concrete reinforcing bar (rebar) which was also announced on the same day.

It is learnt that the proceedings involve SWAM and Miti. The Malaysian Steel Association (MSA), whose petitions last year initiated the safeguard investigations that culminated in the safeguard duties, had applied to be part of the proceedings.

Rebar is mainly used for construction activities in Malaysia whereas SWR and DBIC are used by downstream steel manufacturers — many of whom are SWAM members — to produce steel wire mesh, fending and fasteners such as nuts, bolts and nails.

The duties for SWR and DBIC begin at 13.9% for the year up to April 14, 2018, then 12.9% and 11.9% respectively for the subsequent two years. Meanwhile for rebar, imports are slapped with a 13.42% import duty for 12 months up to April 13, 2018, followed by 12.27% and 11.1% each for the subsequent two years.

To recap, Miti had imposed the two duties after concluding two parallel safeguard investigations, which it initiated following safeguard petitions by the MSA in June 2016.

During the three-year period of safeguard duties, the petitioners would have to implement the individual adjustment plans submitted alongside their petitions. While plans vary, the steel mills had generally aimed to boost efficiency and productivity by improving processes and investing in plant upgrades and modifications, among others.

“During the implementation phase, the government reserves the right to review and make changes to the safeguard measures after taking into consideration various circumstances such as the adjustment plan,” Miti told The Edge Malaysia weekly last April when asked about the adjustment plan.

The MSA petitioners are Ann Joo Steel Bhd, Southern Steel Bhd, Malaysia Steel Works (KL) Bhd as well as Lion Industries Corp Bhd’s subsidiaries Amsteel Mills Sdn Bhd and Antara Steel Mills Sdn Bhd.

They had claimed that the domestic producers of rebar, SWR and DBIC were substantially hurt by surging imports between Oct 1, 2012, and Sept 30, 2015, which caused them to lose market share, downsize workforce and scale back operations.

Collectively, the participating steel mills account for 73.4% of local rebar output and 100% of local SWR and DBIC production.

The petitions were strongly objected to by various steel industry players who use the three steel products as raw materials because the additional duties would increase their procurement costs, hurting profit margins.

For rebar, the objecting players had included the Master Builders Association Malaysia and the Malay Contractors Association Malaysia.

Meanwhile, SWAM — whose members include public-listed manufacturers such as Chin Well Holdings Bhd, Engtex Group Bhd, Leader Steel Holdings Bhd and YKGI Holdings Bhd — had raised concerns over the safeguard petition for SWR and DBIC.

“During the investigations, the government assessed the issues and concerns submitted by all interested parties in accordance with the Safeguards Act 2006 and Safeguards Regulations 2007,” said Miti when announcing the imposition of the safeguard duties in April.

Rm 8.50 for traders loh...!!
Rm 8.888 based on Petron mkt cap equilibrium with HRC
Rm 9.00 OTB short term TP
Rm 10.00 John Lu bet with CKC
Rm 11.44 when HRC-ca equal to HRC mother price
Rm 12.00 based on PE 6x Eps Rm 2.00
Rm 12.80 OTB mid term TP
Rm 14.00 based on PE 7x EPS Rm 2.00
Rm 16.00 KYY target
Rm 18.00 Paperlane Target
Rm 19.50 based on Pe 6x Eps rm 3.25
Rm 22.00 Raider target based on 50% replacement cost of refinery
Rm 33.00 based on HRC equal to Titan Mkt Cap
Rm 42.00 Raider/alex 100% replacement cost of refinery & pe 24.5x
Rm 48.00 based on eps rm 2.00 PE 24x of Pet dag
Rm 72.00 based on Eps rm 3.00 PE 24x of Pet dag
Rm 78.88 based on Pet Dag mkt cap equal to HRC mkt cap
RM 82.00 based on trader panic buying
RM 89.00 based on KLCI surpass 2000 point

Rm 8.50 for traders loh...!!
Rm 8.888 based on Petron mkt cap equilibrium with HRC
Rm 9.00 OTB short term TP
Rm 10.00 John Lu bet with CKC
Rm 11.44 when HRC-ca equal to HRC mother price
Rm 12.00 based on PE 6x Eps Rm 2.00
Rm 12.80 OTB mid term TP
Rm 14.00 based on PE 7x EPS Rm 2.00
Rm 16.00 KYY target
Rm 18.00 Paperlane Target
Rm 19.50 based on Pe 6x Eps rm 3.25
Rm 22.00 Raider target based on 50% replacement cost of refinery
Rm 33.00 based on HRC equal to Titan Mkt Cap
Rm 42.00 Raider/alex 100% replacement cost of refinery & pe 24.5x
Rm 48.00 based on eps rm 2.00 PE 24x of Pet dag
Rm 72.00 based on Eps rm 3.00 PE 24x of Pet dag
Rm 78.88 based on Pet Dag mkt cap equal to HRC mkt cap
RM 82.00 based on trader panic buying

Thank you, Edward.

Edward, does it possible to resume HRC production in future?

http://www.sinchew.com.my/node/1652102/

Thanks probability!

Hi @probability sifu. From where did you calculate that YKGI's gross profit margin has risen to 15.6%? YKGI's latest quarter report format seems different compared to the previous quarter report.

probability looking at gross margin and revenue, Prestar is currently only operating at ~50% of its rated manufacturing capacity. Tubes and Storage system solution are probably the main contributors on throughput currently.

I think the Gross Margin is fairly fixed around current level (RM500/ton). The growth in revenue is where the prospects are...that seems inline with the recent job advertisement and projects surfacing...and the recent local developments (HRC sourcing due to Megasteel closure) enabling it to compete internationally for export market.

The guard rail demand due to local Highway projects are the new contributors ...and we should see that adding to its revenue going forward for the next few years..
24/03/2017 18:51

Hi @probability sifu. From where you find that Prestar is currently running 50% of its rated capacity?