steel correlated to iron ore prices. all commodities got whacked recently. so it makes sense. but a sustained move requires iron ore prices to drop further.
Oh that time big drop from 0.41 so i take it as a chance to enter with low price . I book for 10,000 shares but just get 1800 shares only . Haha earn abit only. But better than put $$ at bank more than fd interest.
Leader Steel sees better Q2 results: Leader Steel Holdings Bhd expects its second-quarter results this year to improve by at least 20% versus the first quarter. The company sees its quarterly sales, which have risen by 5% to 10% in the past, improving on surging demand due to the shortage of hot and cold-rolled raw materials. - StarBiz
theedgemarkets.com highlighted eight stocks with momentum at Bursa Malaysia’s afternoon market close today. The list showed three stocks with positive momentum and five with negative momentum.
The stocks with positive momentum are:
Wong Engineering Corp Bhd — fell 0.5 sen at 61.5 sen
its steel theme rally now. megasteel shut down. will still be in rally next week together with aluminium like LB & Arank. But remember to take profit before the end of the month
BUKIT TENGAH: Leader Steel Holdings Bhd expects its second-quarter results to improve by at least 20% over the first quarter 2016 and the same period last year.
Group managing director Datin Tan Pak Say said the increased in sales was usually between 5% and 10% per quarter but due to the shortage of hot and cold-rolled raw materials, the demand had “surged”.
There is a shortage in the market today for such raw materials because Malaysia had imposed anti-dumping duties on steel coil product such as hot-rolled coil (HRC) and cold-rolled coil (CRC) from China, Indonesia, and Vietnam.
“In the country, you can only source steel coil products from maybe three to four players in the market. But the supply is very limited because some of the local steel coil re-rolling mills are exporting their products,” she added.
HRC products are used to make structural steel while CRC for thinner steel used in the furniture industry, according to Tan.
The current price of HRC and CRC is about 30% more than from two months ago.
Hot-rolled pipes are selling around RM2,850 per tonne, while cold-rolled tubes at about RM3,100 per tonne. “Our selling price of steel pipes and tubes have increased at least by about 30%-35%,” she added.
Moving forward, the group had recently invested about RM2mil in a new production line for its plant in Bukit Tengah to increase monthly output by more than 10%.
“This increase in output should help the group enlarge its market share in the country. Leader Steel’s steel pipes and tube products are sold to hardware wholesalers in Malaysia,” she added.
According to Tan, the price of steel coil products imported from Taiwan and Japan is expected to rise by 8% to 10% in July and August due to the shortage in the Asia region.
“In the fourth quarter, the pricing is expected to stabilise as the shortage situation will improve,” she said.
On the mineral trading business, Tan said the group expected the contribution from the segment for 2016 to be around 30% to 35%, as the price of mineral had improved significantly early this year.
KUALA LUMPUR: Painting a positive outlook for the steel industry, the Malaysian Iron and Steel Industry Federation (Misif) said there will also be more mergers and acquisitions (M&A) — vertical and horizontal — over the next two years due to overcapacity.
“The industry needs to consolidate through mergers and acquisitions,” said Misif president Datuk Soh Thian Lai, adding that the consolidation would boost competitiveness in the sector.
More than 10 of Misif’s 150 members have expressed interest in the consolidation effort, Soh told a press conference yesterday at the 12th Misif Conference on Status and Outlook of the Malaysian Iron and Steel Industry.
He, however, declined to disclose the names of the companies.
Opening the conference earlier, Deputy International Trade and Industry Minister Datuk Ahmad Maslan said industry players must seriously reflect on the need for consolidation in this challenging time.
“Apart from mergers and acquisitions, the industry can consider domestic partnerships or joint ventures to consolidate and realign production to meet demand, in both the domestic and export markets,” added Ahmad.
Stressing that consolidation would benefit the industry, Malaysia Steel Institute (MSI) chief executive officer Jarrod Lim pointed out that China’s steel players became stronger and showed great improvement after a year of consolidation.
Lim said the Malaysian government has initiated a five-year consolidation plan involving three stages. The first stage would be to promote the effort to all the players in the industry, which MSI will be doing from November.
MSI will then proceed to the second stage — implementing the consolidation effort if there is a positive feedback from the industry players. The third stage involves ensuring the sustainability of the overall industry.
Speaking at the same press conference, Southern Steel Bhd managing director Chow Chong Long said overcapacity in the industry has affected the steel producers as there are too many players and profitability is not seen.
Soh stressed that the overcapacity was caused by China exporting a lot of light products to Malaysia, and not due to overinvestment.
“The overcapacity is not because we overinvest,” he said, adding that the current investment is based on the anticipated increase in steel consumption.
China’s steel exports to Malaysia increased from 900,000 tonnes in 2011 to 3.4 million tonnes in 2015, he said.
Amid the challenging economic conditions, Misif sees a better outlook for the iron and steel industry in 2017.
“The worst is over,” said Soh. “The industry has ‘edged’ up since 2015 and we see the upward trend.”
He said steel prices have recovered after China cut its output. Beijing has agreed to slash its production capacity by 45 million tonnes this year.
Soh said steel prices have normalised in the current quarter compared to sharp falls a year ago. The normalisation is expected to persist in the fourth quarter of this year before an upward trend is seen in 2017, he said.
He noted that prices have moved up by 10%, with another 5% to 10% increase expected.
Currently, long steel is priced between RM1,800 and RM1,950 a tonne, while iron ore is priced at US$56 (RM236) per dry tonne.
Following Megasteel Sdn Bhd’s closure, short-term measures have been implemented. Hot rolled coils (HRC) are now being imported with a one-year duty exemption and are now priced at US$450 a tonne.
The total consumption of HRC is 2.3 million tonnes of which 700,000 tonnes are locally produced.
For Budget 2017, Soh hopes the government will reduce the corporate tax by 3% and grant 100% investment tax allowance to industry players instead of the current 60%.
“This will encourage more companies in the construction industry to adopt the industrialised building system, which is currently adopted by less than 20% of the local construction sector,” he said.
On the mineral trading business ie iron ore, LSTEEL expected the contribution from the segment for 2016 to be around 30% to 35%, as the price of mineral had improved significantly this year (around usd70 now, it lowest is at usd38)
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
jacklew
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Posted by jacklew > 2012-05-24 14:49 | Report Abuse
can take a look on Annjoo too.