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Malaysia Steel Industry Report - 2015

Malaysia Steel Industry Report - 2015 This report profiles Malaysia’s steel industry, discussing market trends and outlook through 2014 and into 2015 and beyond. The report also highlights key leading players in the sector including Lion Industries Corporation Bhd, Ann Joo Resources Bhd, CSC Steel Holdings Bhd, Southern Steel Bhd, and Kinsteel Bhd.

Malaysia is the fourth largest steel consuming country in ASEAN with a domestic steel consumption of 10mn tonnes in 2014, a marginal growth of 0.3%, driven by the government’s mega infrastructure projects. However, the growth in consumption was mostly served by imports as domestic output stagnated and total imports increased by 11%, while exports surged by 31%.

The local steel industry continues to be hampered by the influx of cheap imported Chinese steel products which has depressed domestic selling prices. This is further compounded by the global oversupply situation and sagging demand spurred by China, the world’s largest steel producer, which has led to shrinking world steel prices. In addition, the recent hike in electricity and gas tariffs has driven up operation costs of the steel industry. Under these sluggish market conditions, performances of domestic steel companies generally declined. Most companies saw reduced sales volume and margins erosion.

According to the Malaysian Iron and Steel Industry Federation (MISIF), the domestic steel industry, in consumption terms, is expected to grow at an annual rate of 4% from 2015 to 2018. Nevertheless, the outlook for the Malaysian steel industry is expected to be tough with uncertainties in the operating environment. The positive impact of mega-projects will generally be offset by stiff competition and soft external outlook. Moreover, local steel producers will only fully benefit from the growth in demand of steel if the anti-dumping duties and steel policy imposed by the government are implemented effectively.

Key Points:

The iron and steel industry is a core sector that tracks and closely supports Malaysia’s overall economic growth, contributing around 4% to the GDP.

In line with the roll-out of the government’s mega infrastructure projects, Malaysia’s total steel demand is expected to grow at an annual average rate of 4% until 2018.

Malaysia is becoming a greater net importer of steel products, with China being the largest origin of steel import with a steep increase of 45% in 2014. Total iron and steel products import increased by 11% to 7.7mn tonnes in 2014, mainly due to China imports.

Due to the scale of China’s production and Malaysia’s progressive liberalisation policy, local steel players continue to suffer from the increasing dumping of cheap imported Chinese steel into Malaysia, which has slashed prices and margins.

1. Industry profile
1.1 Global overview
1.2 ASEAN overview
1.3 Country overview
1.4 Industry performance
1.4.1 Production
1.4.2 Consumption
1.4.3 Employment and labour cost
1.4.4 Productivity
1.5 Government policy

2. Market trends and outlook
2.1 Steel industry trends
2.2 Imports and exports
2.3 Impact of government initiatives
2.3.1 3rd Industrial Master Plan
2.3.2 10th and 11th Malaysia Plan
2.4 Impact of China
2.5 Investment
2.6 Prices
2.7 Market outlook

3. Leading players and comparative matrix
3.1 Leading players
3.1.1 Lion Industries Corporation Berhad
3.1.2 Ann Joo Resources Berhad
3.1.3 CSC Steel Holdings Berhad
3.1.4 Southern Steel Berhad
3.1.5 Kinsteel Berhad
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables and charts
Table 1: Global apparent steel use (ASU) for finished steel products (2014–2016)
Table 2: Top 10 apparent steel using countries (2014-2016)
Table 3: Global crude steel production (mn tonnes) (2010–9M2015)
Table 4: Top 10 steel producing countries (mn tonnes) (9M2015)
Table 5: ASEAN apparent steel consumption (metric tonnes) (2014 vs. 2013)
Table 6: Malaysia steel production statistics (metric tonnes) (2010–2014)
Table 7: Malaysia production of finished steel products (metric tonnes) (2010–2014)
Table 8: Apparent steel consumption of total steel products (tonnes) (2010–2014)
Table 9: Apparent steel consumption by finished steel products (tonnes) (2010–2014)
Table 10: Malaysia Budget 2015 major infrastructure projects and estimated value
Table 11: Malaysia imports of iron and steel products (metric tonnes) (2010–2014)
Table 12: Malaysia exports of iron and steel products (metric tonnes) (2010–2014)
Table 13: Imports and exports of major HR, CR and selected steel products (tonnes) (2013 vs. 2014)
Table 14: LIONIND annual steel production capacity
Table 15: LIONIND five-year financial highlights
Table 16: ANNJOO five-year financial highlights
Table 17: CSCSTEL five-year financial highlights
Table 18: SSTEEL five-year financial highlights
Table 19: KINSTEL five-year financial highlights
Table 20: Key financial ratios comparison of the leading players

Chart 1: Top 10 steel producing companies in 2014
Chart 2: ASEAN production, import, export and consumption (2008-2014)
Chart 3: Malaysia's total steel production and consumption (2005-2014)
Chart 4: Apparent steel consumption: long vs. flat (% share)
Chart 5: Malaysia vs. world apparent steel use per capita (2005-2014)
Chart 6: Total employment and labour cost of the iron and steel industry (2010-2015)
Chart 7: Industrial Production Index: basic iron & steel (2010=100)
Chart 8: Malaysia import and export of iron & steel products (2005-2014)
Chart 9: China crude steel capacity vs. supply vs. demand (2008-2014)
Chart 10: Approved investments in basic metal products industry (2014 vs. 9M2015)
Chart 11: Iron ore price trend (Nov 2014-Oct 2015)
Chart 12: LIONIND revenue contribution by segment, 1Q2016
Chart 13: ANNJOO segmental revenue in 2014

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