Steel industry

Steel product picture taken as attach.
Malaysia current 4 major Steel maker on upstream as below 4.
Stock / Price / Date
1) Annjoo / 3.7 / 8 Sept 17
2) South Steel / 2.28 / 8 Sept 17
3) Lion Industry / 1.39 / 8 Sept 17
4) Masteel / 1.27 / 8 Sept 17

All these steel sector was claim to be on the uptrend due to china reduce production.
i think it is more easier to calculate the cost for steel sector as it is merely the iron core pricing,
scrap metal pricing
Current market steel price have increase 12% compare to cost maximum 10% , so there is still about 2% marginal profit.
lets check again on Q3 results which release on Nov 17.


Below information for Ann joo.
Assuming input costs are prudently managed, Q3 earnings of some steel companies could at least repeat the first quarter 2017’s exceptionally strong earnings. Margins could expand in the third quarter 2017 as steel bar prices increased 12.1% m-o-m in August 2017, offsetting the 9.8% m-o-m and 10% m-o-m increase in scrap and coal prices respectively.

Margins will also improve on the back of strong sales volume in the third quarter 2017. Apart from China demand, industry observers believed that local inventory was low currently (Aug 2017) and local stockists had curbed deliveries.

Although observers expect steel prices to ease in Q4 to reflect the seasonal slowdown in China’s construction activities, rising domestic demand (amid a pick-up in mega projects) should provide some support to domestic steel prices.

Currently (Aug 2017), domestic steel billets are fetching an 18% premium to China’s billet prices versus a 4% premium in August 2016.

Streets opine given that steel companies were now (Aug 2017) enjoying strong cash flows and reasonably good demand visibility in the intermediate term, expected some steel companies to adopt generous dividend policies or/and embark on a meaningful capacity growth.