2013-02-19 10:15:49 - New Materials research report from Business Monitor International is now available from Fast Market Research
BMI's Malaysia Metals Report for Q1 2013 examines how Malaysian steelmakers are responding to the challenge of falling prices and increased input costs and warns that operating margins will remain under threat while domestic steel makers struggle to compete with low-cost Chinese imports. We also touch on how the government has responded with anti-dumping duties on the steel wire rod sector and how this may affect the overall industry. BMI assesses current debates on the regulatory environment with a particular focus on import tariffs on steel imports as pressure grows for a more protectionist stance. It also examines the prospects for the tin refining sector.
Full Report Details at
BMI is very positive on the prospects of refined tin
production in Malaysia given strong indications of market growth and increased production. Still-elevated tin prices and tight tin supply in the market (at least until new concentrate production from Australia and other emerging economies comes online in 2013/2014), should mean that 2012 will be another growth year for Malaysian steel production. We maintain our forecast of 5% in 2012 following the ramp up of key transportation projects in the capital to higher steel-intensity stages.
Moderation in Chinese output over the medium term as inefficient smelters are closed should see a tightening in the regional tin market thereby sustaining Malaysian refining margins. This is exemplified by MSC's latest quarterly report showing a net profit in refined tin production for the nine months ended September 2012 and a net loss in the mined tin segment.
Over the last quarter BMI has revised the following forecasts/views:
* As we extend our production forecast to 2017, BMI does not foresee any significant increase in the country's refined tin consumption rate as end-use industries, such as electronics or solders, are typically not Malaysia's strong points. We expect production to reach 55.4kt by 2016, a sharp increase from 2011 refined tin production levels of 40.2kt. We expect near zero consumption growth in 2017 as Malaysia is not a major consumer of the metal nor does it plan to grow any domestic electronics manufacturing industry.
* In the medium term, Malaysian tin should benefit from a tightening regional market as the Chinese government acts to curb tin output. Moreover, Indonesia is looking to implement export restrictions that will further constrain an already tight market. While consumption growth will be limited, these measures should ensure that demand outpace supply thereby supporting refined tin prices and maintaining healthy profit margins.
* The Malaysian steel industry will not escape the challenges of the weakening steel prices and lower demand seen across the international market. The situation in the Malaysian market is set to remain uncertain and therefore volatile until the results of the June 2013 general election. Capacity growth in 2013 will come from the 700ktpa expansion of Hiap Teck Venture Bhd.
Report Table of Contents:
- Malaysia Business Environment SWOT
- Steel: Government Fights For Local Industry Development
- Table: Malaysia - Steel Production & Consumption ('000 tonnes, unless stated otherwise)
- Tin: Strong Growth Potential In Refined Tin Production
- Table: Malaysia - Refined Tin Consumption & Production ('000 tonnes, unless stated otherwise)
- Macroeconomic Outlook
- Rebalancing And Implications For Growth
- Table: Malaysia - Economic Activity
- Steel To Average US$360/tonne In 2013
- Table: Steel Forecast
- Table: Steel Forecasts, 2008-2014
- Monthly Metals Update
- Iron Ore: Temporary Resilience
- Steel: No Sustained Recovery
- Aluminium: Resistance To Be Tested
- Copper: Chinese Stockpiles Present Downside Risk
- Lead: Range-Trade Ahead
- Nickel: No Return To 2012 Highs
- Tin: Continued Outperformance
- Zinc: Little Room For Optimism
- Table: Select Commodities: Performance & BMI Forecasts
- Local Companies Compete Heavily With Imports
- Government Likely To Impose Anti-Dumping Duties In 2013
- Table: Provisional Import Duties Valid Until February, 2013
- Malaysia Smelting Corporation Berhad
- Table: Malaysia Smelting Corporation - Financial Results
- How We Generate Our Industry Forecasts
- Cross Checks
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