KUALA LUMPUR (Feb 10): Malaysian steel-related stocks were lower on Monday following a threat of new tariffs on all steel and aluminium imports into the US.
The planned move by US President Donald Trump dragged steel stocks on Bursa Malaysia to their cyclical lows on Monday. Nevertheless, low trading volume in the market indicates a lack of interest from investors in the sector.
Malaysia's steel industry will be affected to a certain extent, said Apex Securities head of research Kenneth Leong, noting that the sector has exported about RM305 million worth of iron and steel to the US in 2023.
Southern Steel Bhd (KL:SSTEEL), which has the largest market capitalisation at RM743 million, slipped 1.0% to 49.5 sen. The company has been in the red for the past three financial years. Ann Joo Resources Bhd (KL:ANNJOO), another loss-making steel firm, fell 0.6% to 82.5 sen.
Steel manufacturers in the black were also affected, as Hiap Teck Venture Bhd (KL:HIAPTEK) fell 1.5% to 33 sen, while CSC Steel Holdings Bhd (KL:CSCSTEL) down 0.9% to RM1.16.
“For now, we expect steel prices to be under pressure, owing to sluggish demand, particularly in China,” said Apex Securities’ Leong. “Excess production capacity is expected to flood markets” though Malaysia has been quick to act to counter dumping, he said.
The local steel industry was marred by overcapacity and pricing pressure from imports, particularly from China. Prices of steel have been on their longest-running decline since the pandemic and hit an eight-year low in September last year.
The China Steel Price Index is in a four-year downtrend amid troubles in the country’s real estate sector while investors moderate their optimism on stimulus for the world’s second-largest economy.
In November, Deputy Minister of Investment, Trade and Industry Liew Chin Tong flagged the dumping of Chinese-manufactured products, especially in the construction and real estate industries.
Further, capacity in Southeast Asia for iron and steel could potentially more than double to 150 million tonnes by 2026 from 2021, he noted.