Malaysia Metals Report 2015
BMI View: Both the steel and tin sectors will come under increased pressure over 2015 as a combination offalling price levels and increased regional production continue to eat away at companies' profit margins.
Against this backdrop, we expect Malaysia's metals sectors to take an increasingly defensive stance withprotectionist policy and reduced investment expected to be a repeated feature over the months ahead.
The operating environment for Malaysian metals producers will remain challenging over 2015. On one side,companies, including steel and tin mills, are faced with falling prices, with both steel and tin prices forecastto fall further on a global level over the coming quarters. Meanwhile, both sectors face the increased threatof competition from other producers in the Eastern Asia region. For Malaysia's steel mills, the main threatin this regard stems from China, whose steel exports rose by 50% over 2014 as producers looked to offsetslowing local demand. As of early 2015, the signs are that Chinese exports will continue to rise over theyear, while Malaysia also faces a growing challenge from the Vietnamese steel industry.
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