MISIF calls for improvement in liberalised package
PETALING JAYA: The newly announced liberalised package for steel sector should be further improved to make it more conducive for local steel companies. Malaysian Iron and Steel Industry Federation (Misif) president Chow Chong Long said while Misif welcomed the move, it did not view it as “a complete” liberalised package. Misif believed a more liberalised steel industry would, over time, support the development of a more efficient and competitive sector in Malaysia, he said in a statement yesterday. “Misif will continue to work with the International Trade and Industry Ministry (Miti) to sort out various issues that would arise and hopes to improve on the new package. “Certain policies under the package will not be conducive in cases in which some steel companies may have problems sourcing for good materials and would have to pay 25% import duty,” he added. To do this, Misif would work with Miti to see how the sourcing of materials could be further improved for the competitiveness of the industry. Chow said a major development would be the enforcement of industrial standards. “While it may appear cumbersome for companies to have to go through the procedures of seeking approval in terms of industrial standards, Misif views it important that the quality and safety of products be properly assessed before they are released to the local market for consumption. “In fact, Misif is of the view that the enforcement of standards is already late in coming. But again, to help industries adjust, Miti has agreed that the implementation be introduced in stages,” he said. Megasteel Sdn Bhd executive chairman Tan Sri William Cheng said in a statement that the import duty review from 50% to 25% for all flat products and the duty to be gradually reduced further would enable the industry to be streamlined and more competitive. “This review will increase the consumption of locally produced cold-rolled coils and benefit the cold-rolled mills whose capacity now far exceeds local consumption,” he added. As the cold-rolled mills used the hot-rolled coils (HRC) from Megasteel as feedstock in their production process, this would also benefit Megasteel, a unit of the Lion Group. With the support for cold-rolled production under the policy review, local cold-rolled mills including Megasteel would have better capacity utilisation. He said it would boost the capacity utilisation of Megasteel’s HRC plant from 45% to 80% and with increased export orders, to 100% in a short period. Cheng noted that the policy review augured well for the entire industry, with both upstream and downstream players working together to compete internationally and prevent foreign steel mills from dumping their products in Malaysia.
PETALING JAYA: The newly announced liberalised package for steel sector should be further improved to make it more conducive for local steel companies. Malaysian Iron and Steel Industry Federation (Misif) president Chow Chong Long said while Misif welcomed the move, it did not view it as “a complete” liberalised package. Misif believed a more liberalised steel industry would, over time, support the development of a more efficient and competitive sector in Malaysia, he said in a statement yesterday. “Misif will continue to work with the International Trade and Industry Ministry (Miti) to sort out various issues that would arise and hopes to improve on the new package. “Certain policies under the package will not be conducive in cases in which some steel companies may have problems sourcing for good materials and would have to pay 25% import duty,” he added. To do this, Misif would work with Miti to see how the sourcing of materials could be further improved for the competitiveness of the industry. Chow said a major development would be the enforcement of industrial standards. “While it may appear cumbersome for companies to have to go through the procedures of seeking approval in terms of industrial standards, Misif views it important that the quality and safety of products be properly assessed before they are released to the local market for consumption. “In fact, Misif is of the view that the enforcement of standards is already late in coming. But again, to help industries adjust, Miti has agreed that the implementation be introduced in stages,” he said. Megasteel Sdn Bhd executive chairman Tan Sri William Cheng said in a statement that the import duty review from 50% to 25% for all flat products and the duty to be gradually reduced further would enable the industry to be streamlined and more competitive. “This review will increase the consumption of locally produced cold-rolled coils and benefit the cold-rolled mills whose capacity now far exceeds local consumption,” he added. As the cold-rolled mills used the hot-rolled coils (HRC) from Megasteel as feedstock in their production process, this would also benefit Megasteel, a unit of the Lion Group. With the support for cold-rolled production under the policy review, local cold-rolled mills including Megasteel would have better capacity utilisation. He said it would boost the capacity utilisation of Megasteel’s HRC plant from 45% to 80% and with increased export orders, to 100% in a short period. Cheng noted that the policy review augured well for the entire industry, with both upstream and downstream players working together to compete internationally and prevent foreign steel mills from dumping their products in Malaysia.
CIS billet export prices continue to rise
The export prices of billet from Russia and Ukraine jumped by $30/tonne this week, with some traders quoting $414/t fob Black Sea as the highest offer levels in the market today. "This market has gone crazy," a prominent trader tells Steel Business Briefing. Demand appears to be strengthening due to seasonal re-stocking and perhaps some speculative buying. The impact of this is exaggerated by continuing steady demand from China and South East Asia, at a time when demand is exceeding supply everywhere, sources say. "There is no problem to sell," one major Russian producer tells SBB. Indeed, the problem is to buy. The African-Mediterranean region . including Turkey, North Africa, Jordan and Syria . is described as alive with renewed demand, whilst the Middle East has had few "very large" orders. Meanwhile, Iran is said to be uncertain in current political climate, along with Europe, which is still "lagging behind." Traders note, however, that neither Russia nor Ukraine need these markets for their billet sales. Russian offers are reported to be in the region of $400-410/t and Ukrainian $390-400/t fob Black Sea, concluded deals. OEMK and Ural Steel along with Novorossmetal are said to have been offering, with Mechel and Evraz currently out of the market, having sold their July tonnages already. Sources close to the Russian producers say they are considering selling September, with July sold and August nearly sold. Traders warn that, with Asian demand still firmly at $430/t cfr China, such an aggressive increase may backfire with a major collapse when restocking is over, next month.
CISA not optimistic about China steel market outlook
The China Iron & Steel Association (CISA) released a report on 17 June reminding members that the domestic market outlook gives little cause for optimism, and warned that a "cautious and rational" approach should be taken to recent price increases. Though domestic demand growth will be sustained thanks to government policies to encourage domestic consumption, CISA stresses that negative factors including global sluggish demand, excess domestic steel capacity and climbing imports all suggest the industry still faces a severe environment. CISA argued that the May steel price increase can be partly attributed to growth of investments and to steel demand spurred by the central government's economic stimulus policies. Steel Business Briefing notes that Shanghai rebar prices in May increased by about RMB 150/t ($22/t); Shagang's rebar ex-works price jumped by RMB 170/t in the same month. The month-on-month drops in steel market inventories since February is another reason behind the uptrend. Stocks of construction steels saw the largest decrease by end-May, with a m-o-m decline of 5.6% for rebar and 14.8% for wire rod. Inventories of cold rolled coil and plates dropped by 5.4% and 1.6% in May. But stocks of hot rolled coils show slight increases though CISA didn't give details. CISA pointed out that heating raw material markets have also played a part in the upwards steel price movement. But a distinct oversupply of some flat products, such as HRC and plates, is noted. Despite the encouragement of the stimulus package, a supply-demand balance in longs cannot be easily achieved either given the quick production restoration among small- and medium-sized mills.
The export prices of billet from Russia and Ukraine jumped by $30/tonne this week, with some traders quoting $414/t fob Black Sea as the highest offer levels in the market today. "This market has gone crazy," a prominent trader tells Steel Business Briefing. Demand appears to be strengthening due to seasonal re-stocking and perhaps some speculative buying. The impact of this is exaggerated by continuing steady demand from China and South East Asia, at a time when demand is exceeding supply everywhere, sources say. "There is no problem to sell," one major Russian producer tells SBB. Indeed, the problem is to buy. The African-Mediterranean region . including Turkey, North Africa, Jordan and Syria . is described as alive with renewed demand, whilst the Middle East has had few "very large" orders. Meanwhile, Iran is said to be uncertain in current political climate, along with Europe, which is still "lagging behind." Traders note, however, that neither Russia nor Ukraine need these markets for their billet sales. Russian offers are reported to be in the region of $400-410/t and Ukrainian $390-400/t fob Black Sea, concluded deals. OEMK and Ural Steel along with Novorossmetal are said to have been offering, with Mechel and Evraz currently out of the market, having sold their July tonnages already. Sources close to the Russian producers say they are considering selling September, with July sold and August nearly sold. Traders warn that, with Asian demand still firmly at $430/t cfr China, such an aggressive increase may backfire with a major collapse when restocking is over, next month.
CISA not optimistic about China steel market outlook
The China Iron & Steel Association (CISA) released a report on 17 June reminding members that the domestic market outlook gives little cause for optimism, and warned that a "cautious and rational" approach should be taken to recent price increases. Though domestic demand growth will be sustained thanks to government policies to encourage domestic consumption, CISA stresses that negative factors including global sluggish demand, excess domestic steel capacity and climbing imports all suggest the industry still faces a severe environment. CISA argued that the May steel price increase can be partly attributed to growth of investments and to steel demand spurred by the central government's economic stimulus policies. Steel Business Briefing notes that Shanghai rebar prices in May increased by about RMB 150/t ($22/t); Shagang's rebar ex-works price jumped by RMB 170/t in the same month. The month-on-month drops in steel market inventories since February is another reason behind the uptrend. Stocks of construction steels saw the largest decrease by end-May, with a m-o-m decline of 5.6% for rebar and 14.8% for wire rod. Inventories of cold rolled coil and plates dropped by 5.4% and 1.6% in May. But stocks of hot rolled coils show slight increases though CISA didn't give details. CISA pointed out that heating raw material markets have also played a part in the upwards steel price movement. But a distinct oversupply of some flat products, such as HRC and plates, is noted. Despite the encouragement of the stimulus package, a supply-demand balance in longs cannot be easily achieved either given the quick production restoration among small- and medium-sized mills.
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