Steel sector to be hit by more global headwinds, says MIDF Research
KUALA LUMPUR (Aug 13): Malaysia's steel sector is likely to experience further headwinds, as global demand is likely to be further hit by shaky demand from China's waning construction sector, in addition to risks from trade war tariffs, said MIDF Amanah Investment Bank Bhd Research.
"We view that the steel sector will be affected negatively in 2018 and 2019," MIDF Research analyst Fadhli Dzulkifly wrote, pointing to changes in global trade policies, tepid global demand and the local steel mill cost structure as impediments to any positive demand.
Six counters under MIDF Research's watch — Ann Joo Resources Bhd, Lysaght Galvanized Steel Bhd, Southern Steel Bhd, CSC Steel Holdings Bhd, Mycron Steel Bhd and Choo Bee Metal Industries Bhd — have previously shown negative reactions to news on the trade war and tariff impositions by the US and European Union, he said in a special update today.
"We reckon that this trend will persist as global steel demand is expected to grow 1.8% year-on-year to 1.62 billion metric tonnes in 2018, and tepid growth will be plagued by low demand in 2019, growing 0.7% year-on-year to 1.63 billion metric tonnes," Fadhli said.
On top of that, most local players are affected by fixed overheads and unwavering operation expenditure, making the sector unattractive, he said.
The market has currently priced in risks such as tariff impositions, but demand is expected to decline further due to China's environmental health and occupational safety policies, MIDF Research added.
However, the exclusion of building materials from the sales and services tax (SST) is expected to give a breather to Malaysia's construction and steel sectors.
"SST will enable steel sector to maintain its product supply to construction sector without any additional cost," Fadhli said.
Syndicate use you help me , i help you method , prevent the plunged down , today stop the plunged down , but it cannot last LONG , to nite DJI PLUNGED FIERCE , tomorrow all movies will GONE , FULL STOP , GAME OVER TRACE .
OBSERVE or not ? INDEX DROP 22 point , Masteel forward RIDE UP 0.25 cent , LOGIC or not ? if MAD only trust it is REAL WAVE , all is artificial , PLUS sentiment is getting worst , today don't know Tomorrow how worst become , still can RISE ???
GOOD QUESTION , WHAT IS ROSSA , trace bloomberg , answer is there , i tell you , don't tell any body , ROSSA FUND enough to make ORE LAND FAMOUS WHOLE REGION , LAST GEORGE SORO TAKE WAY , NOW ROSSA PLANT IT BACK .
Smart syndicate , pull up to trap people in , if you not patient , see people make it even make it , buy in today , i congratulation you , your hard coin is consider hard burn , left nothing , i not blame you , i blame the cruel of syndicate .
Mr. OTB asked his followers to buy lionind during the stockwatch this weekend.
See now Mr. OTB help the syndicate to offload the lionind shares even though he aware that the steel demand is not high and alliance steel production is going to flood the malaysia market with excessive production due to the halt of ECRL project..
Mr. OTB first time asked followers to cutloss below 0.70 to let syndicates collect at cheap price, then ask his followers to buy back at priuce 1.10 to let syndicates offload the shares. See syndicates can easily make profit of more than 60% in one month.
i pity the buyer , always chase when see the price continue break record high , you know you even exploit to the risky is higher , crashed , your bone also powder off .
mahathir confirm terminated two big project , less demand for steel iron for sure , more to cut , i heard , after china trips , possible hair wire back , heard LGE also not follow , mean he also give up , mean not great news on hope !
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khatulistiwa1234
46,261 posts
Posted by khatulistiwa1234 > 2018-08-13 13:51 | Report Abuse
I believe on CYCLE JUSTICE < GOD PUNISH THEM .