Saturday, 23 April 2016
FROM a chronic oversupply situation just months ago, there is now a sudden shortage of steel in Malaysia, causing a rapid rise in prices.
The shortage stems from drastically lower imports of the commodity from China, due to the increasing demand for steel there, according to industry experts.
“The shortage we are seeing now is because Chinese exporters are cancelling their earlier contracts as they can fetch higher prices domestically.
“Steel prices are going up very quickly, and because we are importing much less, there appears to be a shortage,” says an industry source.
He says it is due to this situation that steel prices in Malaysia have shot up.
Last year, Malaysian steel millers were badly hit due to the aggressive dumping of China steel products at below-cost price in the global market.
Export prices were below cost by US$39 (RM1541) to US$89 (RM346) per tonne.
The companies suffered huge losses, with many cutting down capacity, retrenching workers and even shutting down mills.
In November, it was reported that the local mills were on average, operating at about a 30% capacity due to the chronic oversupply situation.
An industry source tells StarBizWeek that steel consumers in Malaysia, such as the construction industry, are now feeling the pinch as their costs are being pushed up.
“The local steel manufacturers were neglected when China was dumping steel below the market price – but now consumers are complaining because prices have shot up.
“Many millers had to shut down or cut capacity.
“Now that there is a shortage, they cannot instantly ramp up production - it takes some time.
“They would not have stocked up on raw material, and may have retrenched their skilled workers,” he says.
While Malaysia’s total production capacity is enough to cater to local demand, he says the producers needed time to catch up with the current demand.
However, he says the shortage situation was not expected to last for long.
“This will probably go on until July, after which it is expected to return to the oversupply situation,” he says.
Meanwhile, a peer comparison of 16 steel companies listed on Bursa Malaysia, conducted by RAM Ratings found that a “toxic mix” of rising competition, pricing pressures and domestic cost-push factors will result in another difficult year ahead for Malaysian steel players.
The rating house says the aggregate revenue for the peer group fell to RM15.08bil in financial year 2014 from RM16.32bil in 2011.
“More than half of the peer group recorded at least a year’s worth of operating losses over a 4-year period.
“Even the profitable ones have to be very vigilant as the majority of these recorded margins on operating profit before interest and tax of only 2% to 5%, leaving them vulnerable to any shift in revenue or cost,” says head of Consumer and Industrial Ratings Kevin Lim.
Steel companies have had to deal with rising domestic costs, which have slashed their margins, according to Lim.
“As expected, these companies also exhibited very volatile pre-tax profits and cashflows,” he adds.
The study also found that half of the companies studied had gearing ratios of at least 0.90 times, with many of the highly geared companies reporting “unimpressive” cashflow protection.
It says the average borrowings rates had risen for almost all the companies.
“Several of the larger entities have also issued private debt securities after the global financial crisis, proving that qualified borrowers should still be able to tap the debt market.
“On the other hand, fund-raising activity on the equity front has been rather muted,” it says, adding that the 16 companies had only raised some RM293mil in equity between 2011 and 2014, mostly driven by a single company, to partially fund its capital expenditure.
“With competition likely to get more intense, industry consolidation certainly makes sense, although this undertaking is certainly not a simple case of 1 plus 1 equals 2”.
“Financial risks aside, mergers and acquisitions would also involve various integration challenges. However, weak balance sheets and/or volatile cashflows are likely to constrain the ability of domestic players to undertake large scale mergers and acquisitions that could restructure the local playing field,” it says.
TheStar
Construction industry reels from steel price hike
Saturday, 23 April 2016
Industry hit by a 50% hike in price of steel bars
THE construction industry is entering an unprecedented crisis, as the price of steel bars has increased by more than 50% since January.
The hike will affect the business of contractors in the country and raise prices by over 5%, absorbed by the contractors.
Penang Master Builders & Building Materials Dealers Association president Datuk Lim Kai Seng told StarBizWeek that the price of steel bars have increased from about RM1,500 per tonne in January this year to about RM2,450 per tonne at present.
“Contractors who had secured construction jobs from either the Government or the private sector prior to the latest increase in steel pricing are in a jam now, as they have to adhere to the old pricing negotiated early this year.
“This could cause many of our members to go bust.
“Until about two weeks ago, the price per tonne was hovering at about RM1,950.
“The prices of other construction materials, however, are still stable,” he adds.
The current price of a 50-kg cement bag is hovering between RM12.50 and RM13.00, while the price of sand is over RM60 per cubic metre.
Real Estate & Housing Developers’ Association Malaysia (Penang) chairman Datuk Jerry Chan (pic) says that the entire situation is topsy-turvy at the moment, as there is a shortage or zero supply of a variety of essential steel bar products.
The shortage has spilled over to steel mesh and pre-cast reinforced concrete products, increasing prices and causing delayed deliveries.
“The price per tonne was hovering at RM1,500 in January and then went up gradually.
“The last two weeks saw the price jumping drastically, causing the price per tonne to be about 50% higher than it was in January,” he says.
Chan explains that when the price of steel bars is down, it helps to cushion the impact of the price hike in labour and other raw materials.
“Now this cushion has been removed.
“If not addressed immediately by the authorities, projects would be delayed and contractors might go out of business.
“The selling price of houses may be increased by 1% to 2% or more if the situation persists,” he reckons.
Ideal Property Group executive chairman Datuk Alex Ooi says there are local steel manufacturing companies that have shut down temporarily recently to do maintenance work.
“This has exacerbated the supply situation of steel bars in the local market.
“Projects may get delayed as a result of the shortage and high pricing.
“Steel bars make up about 45% of the raw materials used in the structure of high-rise projects,” he says. Eco World (North) general manager Khoo Teck Chong says the group has locked in the prices for the essential construction raw materials early this year for most of its launched projects.
“We don’t foresee any delays in the implementation of the projects,” he adds.
TheStar
FROM a chronic oversupply situation just months ago, there is now a sudden shortage of steel in Malaysia, causing a rapid rise in prices.
The shortage stems from drastically lower imports of the commodity from China, due to the increasing demand for steel there, according to industry experts.
“The shortage we are seeing now is because Chinese exporters are cancelling their earlier contracts as they can fetch higher prices domestically.
“Steel prices are going up very quickly, and because we are importing much less, there appears to be a shortage,” says an industry source.
He says it is due to this situation that steel prices in Malaysia have shot up.
Last year, Malaysian steel millers were badly hit due to the aggressive dumping of China steel products at below-cost price in the global market.
Export prices were below cost by US$39 (RM1541) to US$89 (RM346) per tonne.
The companies suffered huge losses, with many cutting down capacity, retrenching workers and even shutting down mills.
In November, it was reported that the local mills were on average, operating at about a 30% capacity due to the chronic oversupply situation.
An industry source tells StarBizWeek that steel consumers in Malaysia, such as the construction industry, are now feeling the pinch as their costs are being pushed up.
“The local steel manufacturers were neglected when China was dumping steel below the market price – but now consumers are complaining because prices have shot up.
“Many millers had to shut down or cut capacity.
“Now that there is a shortage, they cannot instantly ramp up production - it takes some time.
“They would not have stocked up on raw material, and may have retrenched their skilled workers,” he says.
While Malaysia’s total production capacity is enough to cater to local demand, he says the producers needed time to catch up with the current demand.
However, he says the shortage situation was not expected to last for long.
“This will probably go on until July, after which it is expected to return to the oversupply situation,” he says.
Meanwhile, a peer comparison of 16 steel companies listed on Bursa Malaysia, conducted by RAM Ratings found that a “toxic mix” of rising competition, pricing pressures and domestic cost-push factors will result in another difficult year ahead for Malaysian steel players.
The rating house says the aggregate revenue for the peer group fell to RM15.08bil in financial year 2014 from RM16.32bil in 2011.
“More than half of the peer group recorded at least a year’s worth of operating losses over a 4-year period.
“Even the profitable ones have to be very vigilant as the majority of these recorded margins on operating profit before interest and tax of only 2% to 5%, leaving them vulnerable to any shift in revenue or cost,” says head of Consumer and Industrial Ratings Kevin Lim.
Steel companies have had to deal with rising domestic costs, which have slashed their margins, according to Lim.
“As expected, these companies also exhibited very volatile pre-tax profits and cashflows,” he adds.
The study also found that half of the companies studied had gearing ratios of at least 0.90 times, with many of the highly geared companies reporting “unimpressive” cashflow protection.
It says the average borrowings rates had risen for almost all the companies.
“Several of the larger entities have also issued private debt securities after the global financial crisis, proving that qualified borrowers should still be able to tap the debt market.
“On the other hand, fund-raising activity on the equity front has been rather muted,” it says, adding that the 16 companies had only raised some RM293mil in equity between 2011 and 2014, mostly driven by a single company, to partially fund its capital expenditure.
“With competition likely to get more intense, industry consolidation certainly makes sense, although this undertaking is certainly not a simple case of 1 plus 1 equals 2”.
“Financial risks aside, mergers and acquisitions would also involve various integration challenges. However, weak balance sheets and/or volatile cashflows are likely to constrain the ability of domestic players to undertake large scale mergers and acquisitions that could restructure the local playing field,” it says.
TheStar
Construction industry reels from steel price hike
Saturday, 23 April 2016
Industry hit by a 50% hike in price of steel bars
THE construction industry is entering an unprecedented crisis, as the price of steel bars has increased by more than 50% since January.
The hike will affect the business of contractors in the country and raise prices by over 5%, absorbed by the contractors.
Penang Master Builders & Building Materials Dealers Association president Datuk Lim Kai Seng told StarBizWeek that the price of steel bars have increased from about RM1,500 per tonne in January this year to about RM2,450 per tonne at present.
“Contractors who had secured construction jobs from either the Government or the private sector prior to the latest increase in steel pricing are in a jam now, as they have to adhere to the old pricing negotiated early this year.
“This could cause many of our members to go bust.
“Until about two weeks ago, the price per tonne was hovering at about RM1,950.
“The prices of other construction materials, however, are still stable,” he adds.
The current price of a 50-kg cement bag is hovering between RM12.50 and RM13.00, while the price of sand is over RM60 per cubic metre.
Real Estate & Housing Developers’ Association Malaysia (Penang) chairman Datuk Jerry Chan (pic) says that the entire situation is topsy-turvy at the moment, as there is a shortage or zero supply of a variety of essential steel bar products.
The shortage has spilled over to steel mesh and pre-cast reinforced concrete products, increasing prices and causing delayed deliveries.
“The price per tonne was hovering at RM1,500 in January and then went up gradually.
“The last two weeks saw the price jumping drastically, causing the price per tonne to be about 50% higher than it was in January,” he says.
Chan explains that when the price of steel bars is down, it helps to cushion the impact of the price hike in labour and other raw materials.
“Now this cushion has been removed.
“If not addressed immediately by the authorities, projects would be delayed and contractors might go out of business.
“The selling price of houses may be increased by 1% to 2% or more if the situation persists,” he reckons.
Ideal Property Group executive chairman Datuk Alex Ooi says there are local steel manufacturing companies that have shut down temporarily recently to do maintenance work.
“This has exacerbated the supply situation of steel bars in the local market.
“Projects may get delayed as a result of the shortage and high pricing.
“Steel bars make up about 45% of the raw materials used in the structure of high-rise projects,” he says. Eco World (North) general manager Khoo Teck Chong says the group has locked in the prices for the essential construction raw materials early this year for most of its launched projects.
“We don’t foresee any delays in the implementation of the projects,” he adds.
TheStar
寻找钢价3000的动力源泉
2016-04-23 08:30
在连续几年的单边下跌行情后，钢价迎来了强势大幅的反弹，从去年12月开始一路上涨。进入4月，在钢坯和期货价格持续疯狂大涨的推动下，全国钢价亦每天疯狂上涨，日均涨幅超过100元/吨，轻松拿下3000元大关。
动力一：资金
1、资金重塑蓄水池
随着价格的暴涨，机会贸易再度出现，大量中小贸易商积极入市采购备货，以求在价格上涨过程中分得一杯羹，因此前几年几近消失的市场蓄水池作用又逐渐显现。据笔者了解，目前市场中小贸易商非常活跃，积极入市采购囤货的现象较为普遍，多者一两千吨，少者一两百吨，而三四线城市以及乡镇门市部也入市备货，担心后期价格持续上涨，自身经营成本增高，而利润下降。另外，下游工程处于锁定利润，担心后期采购成本过高而影响施工，开始考虑备货待工。
2、资金大幅推涨黑色大宗
春节后北上广深等大城市应对房价高涨相机出台抑制楼市投机的相关措施，大量房地产资金被挤出。此外，由于股市从去年开始持续低迷，部分资金也逐步从股市中逃离处理转战黑色大宗。外来资金的大量涌入不断推高期货的价格，黑色系近期持续暴涨。截止21日主力合约矿1609收474.0较昨结算+26.5，螺纹1610收2750较昨结算+189，热卷1610收2954较昨结算+164。从成交量来看，仅仅期螺主力合约今日成交额就高达6056亿元，超过沪深两市总成交额5421亿元，相当于2亿多吨的螺纹钢在今天易手，而全国一年生产12亿吨的钢材，一年的螺纹钢产量都比不上今天一天。
动力二：供给
随着价格的强势上涨，吨钢利润飙升，导致钢厂的生产积极性较去年比明显提升。截至14日，据Mysteel调查的全国139家建材钢厂，其螺纹钢周产能为456.17万吨，产线条数305条，实际开工条数231条，周开工率为75.7%，较上周增加1.3个百分点；实际周产量325.06万吨，周达产率71.3%，较上周增加0.8个百分点。但从供需角度来看目前市场供给并不充足，许多资源规格严重短缺，而近期江苏、山东等主要资源输出地钢厂因钢坯价格过高、落后产能淘汰等各种原因没能开足马力，厂内库存创历史新低。截止14日，据Mysteel调查的全国139家建筑钢材生产企业螺纹钢库存总量205.22万吨，较上周减少29.91万吨，降幅为12.72%，年同比减少44.18%；线材总量51.39万吨，较上周减少8.11万吨，降幅为13.63%，年同比减少40.52%。
另市场库存方面，4月15日全国主要城市螺纹钢库存为483.27万吨，与上周（2016-4-8）相比下降36.28万吨，降幅为6.98%；与去年同期（2015-4-17）相比下降了217.78万吨，同比降幅为31.06%。
动力三：需求
图一：mysteel统计2015-2016年3-4月全国建材成交量走势对比
由上图一所示，据mysteel统计全国主要城市建材成交量数据显示，2016年3-4月日成交量均值为201970吨，较2015年成交量日均值191261吨相比，日均增加10709吨，增幅约为5.6%。
2016年一季度，固定资产投资(不含农户)85843亿元，同比名义增长10.7%(扣除价格因素实际增长13.8%)，增速比上年全年加快0.7个百分点，比今年1-2月份加快0.5个百分点。2016年3月末，人民币房地产贷款余额22.51万亿元，同比增长22.2%，增速比上年末高1.3个百分点;一季度增加1.5万亿元，同比多增5045亿元，增量占同期各项贷款增量的32.5%，比上年占比水平高1.9个百分点。在基建投资和房地产繁荣的刺激下，今年需求端较去年相比整体有所释放，市场成交有所增加。
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