星期二, 九月 06, 2016

Malaysia Cold Rolled Coil (CRC) producers are enjoying good time - 转贴

Malaysia Cold Rolled Coil (CRC) producers are enjoying good time.

All CRC producers had delivered very good results in the latest quarter report (30/6/2016) due to the following 2 major events:

1. Imposition of Anti-Dumping Duties over imported Cold Rolled Coil by Customs (May 2016);
2. Ceasation of operations by Megasteel (Malaysia SOLE producer of Hot Rolled Coil) (Feb 2016)

Malaysia Top 4 CRC Producers are …
1. CSC Steel Bhd (620,000 tonnes);
2. Mycron Steel Bhd (260,000 Tonnes);
3. YKGI Bhd (220,000 Tonnes);
4. EonMetal Group Bhd (120,000 tonnes)

Malaysia Government has imposed anti dumping duties on CRC imported from oversea for 5 years period effective from 24/5/2016. As such, the selling price of the domestic CRC, which ranged from RM2068 to RM2,292 in 2015, are expected to be maintained or even possibly increased in coming months from Sept 2016.

The Royal Malaysian Customs Department will enforce the collection of anti-dumping duties and this measure will be effective for five (5) years, from 24 May 2016 to 23 May 2021. With the imposition of anti-dumping duties on imports of Cold Rolled Coils of Alloy and Non-Alloy Steel from the alleged countries, it is expected that the issue of unfair trade practices will be addressed.

Hot Rolled Coil (“HRC”) steel sheets are the basic raw material used for the production of the Cold Rolled Coils (“CRC”) steel sheets.

In general, CRC manufacturers produce two main types of CRC, namely:
1. Scrap Based CRC (made from Scrap Based HRC), and
2. Iron Ore Based CRC (made from Iron Ore Based HRC)

It should be noted that Scrap Based CRC has lower metallurgic qualities compared to Iron Ore Based CRC, because its raw material (i.e. Scrap Based HRC) contains impurities which were inherent in the scrap used to manufacture the HRC. Having a lower quality, Scrap Based CRC is used by downstream manufacturers, mainly in the steel tube and furniture sectors.

The higher quality Iron Ore Based CRC, is used by downstream manufacturers, mainly involved in producing steel drums for the petroleum and palm oil sectors, in making components for the automotive industry, in producing steel sheets for color coating and galvanizing purposes, and in the electronic and electrical appliances manufacturing of white goods, such as refrigerators, television sets, rice cookers, microwave ovens, etc.

Scrap Based HRC, which was supplied EXCLUSIVELY by the sole domestic HRC manufacturer, Megasteel Sdn Bhd (“Megasteel”), was used to manufacture lower grade CRC, steel pipes and tubes.

While Iron Ore Based HRC were imported to manufacture of high grade CRC. Although Iron Ore Based HRC is of a higher grade, the cost of the HRC supplied by Megasteel (i.e. lower grade Scrap Based HRC) is HIGHER.

Megasteel had abruptly halted production and supply in February 2016 reportedly due to unpaid electric bills. Megasteel had on 1 April 2016 laid off half of its workers.

According to some unconfirmed reports, CRC producers can now (Sept 2016) import much lower priced but yet better quality HRC from oversea with additional saving of at least RM400 per tonnes if compared to those previously sourced from Megasteel.

Megasteel = continue ceasation of operations as in 22 August 2016.

Southern Steel had also provided impairment loss of RM140m for the invested capital over the HRC production facility. As such, Malaysia does not have any HRC producer at this moment of time (Still Sept )

Kenanga Investment Bank

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