Malaysia Metals Report

Published 17 December 2014

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Malaysia Metals Report

BMI View: Malaysia has a well developed metals sector and is a leading global producer of both steel and tin, However, local producers have been met with increasing pressure from other markets in recent years, with a sharp uptick in Chinese output levels, in particular, leading to downwards pressure on prices and hence production volumes. Out outlook for both the Malaysia steel and tin sectors is therefore one of caution with production growth expected to be moderate over the next few years.

2014 saw Malaysia's steel producers experience falling output and revenues as a flood of cheap imports squeeze prices and margins. With much of this extra supply arriving in the form of cheap products from countries such as China, Indonesia and South Korea, local producers have found themselves hit by falling orders for hot rolled coils as well as other heavily imported steel products. The impact on local steelmills has been considerable with many firms forced to cut capacity in response to growing oversupply. Malaysia is estimated to have imported almost 1.83mnt of steel from China in 2013, including 924,000 tonnes of wire rods, equivalent to 80% of Malaysia's total import volume of the product.

However, in Q414 it appeared that pressure on the government to raise import tariffs was finally paying with the Malaysia International Trade and Industry Ministry (Miti) announcing the introduction provisional anti-dumping duties ranging between 3.15% and 29.37% and will be effective not more than 120 days from Oct 17, 2014.

Malaysia's tin sector is in a similar predicament. The country's tin production volume has fluctuated over the past few years as global demand has fallen and risen in line with economic output. While refined tin production in Malaysia has suffered two consecutive years of decline (2.0% year-on-year (y-o-y) in 2012 and estimated 0.5% in 2013).

Nevertheless, both industries face a number of downside risks over 2015. We expect further cooling in the Chinese...

Table of Contents

BMI Industry View
7
SWOT
8
Metals SWOT
8
Industry Forecast
10
Steel: Producers Face Narrowing Margins
10
Table: Steel Production & Consumption (Malaysia 2012-2018)
14
Tin: Output To Stabilise On Higher Prices
14
Table: Refined Tin Production, Consumption & Balance (Malaysia 2012-2018)
16
Regulatory Development
17
Table: Import Duties - Steel Wire Rods
18
Table: Political Overview
20
Commodities Forecast
22
Commodity Strategy
22
Ferrous Metals:
23
Iron Ore: Bounce Won't Last, Weakness In 2015
23
Steel: Long Road To Price Recovery
24
Non-Ferrous Metals:
25
Aluminium: Elevated Prices In Coming Weeks
25
Copper: Strength To Turn To Weakness By Q414
26
Lead: Price Bounce Underway
27
Nickel: Prices To Cool In Coming Months
28
Tin: Market Tightness To Drive Prices Higher
29
Zinc: Prices To Moderate By Q414
30
Table: Select Commodities - Performance & BMI Forecasts
31
Commodities Forecast
32
Table: BMI Steel Price Forecast
32
Short-Term Outlook
32
Core View
33
Surplus Set To Slim
34
Production: Reining In Growth
34
Consumption: Deceleration Ahead
36
No Respite From Chinese Exports Over Coming Months
38
Arbitrage Set To Grow Between East And West
39
Risks To Price Outlook
40
Table: Steel Data & Forecasts
40
Table: Global Steel Prices By Region & Product, USD/tonne (average)
41
Competitive Landscape
42
Table: Malaysia - Financial Data Of Key Listed Companies
43
Company Profile
45
Malaysia Smelting Corporation Berhad
45
Table: MSC - Key Financial Data
47
Methodology
48
Cross Checks
48

The Malaysia Metals Report has been researched at source, and features latest-available data for steel, aluminium and other major globally-traded commodities. Our analysis covers all primary indicators, including production, exports and price, with our forecasts underpinned by BMI Research's macroeconomists global economic outlook. The report analyses trends and prospects and critically evaluates latest industry news, trends and regulatory developments in Malaysia.

BMI's Malaysia Metals Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the metals industry in Malaysia.

Key Benefits

  • Benchmark BMI's independent metals industry forecasts for Malaysia to test other views - a key input for successful budgeting and strategic business planning in the Malaysia metals market.
  • Target business opportunities and risks in Malaysia through our reviews of latest industry trends, regulatory changes and major projects and investments.
  • Exploit the latest competitive intelligence and company profiles on your competitors and peers.

Coverage

BMI Industry View

A comprehensive summary of the impact and implications of the latest regulatory developments and key forecast indicators covering metals production, consumption and upside/downside risks to our outlook. The Metals SWOT analysis outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.

Industry Forecast

Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:

  • Steel: Steel production & consumption (‘000 tonnes).
  • Aluminium: Aluminium consumption production & balance (‘000 tonnes).
  • Copper: Refined copper production & consumption (‘000 tonnes).
  • Zinc: Refined zinc production & consumption (‘000 tonnes).
  • Lead: Refined Lead production, consumption & balance (‘000 tonnes).
  • Nickel: Refined nickel production & consumption (‘000 tonnes).
  • Tin: Refined tin production, consumption & balance (‘000 tonnes).

Regulatory Development

Details of the industry regulatory framework, relevant key legislation and environmental standards that impact the metals industry. The regulatory developments section provides analysis of the overall regulatory burden, the tax regime (including income tax rates), bureaucratic framework, corruption and a country specific political overview. Details of the industry regulatory framework provide information on relevant key legislation and regulations that will impact the metals industry.

Commodities Forecast

Provides in depth coverage and forecasting of steel prices and includes BMI’s core view of what to expect in upcoming months. Within the monthly metals update, BMI provides performance data and key forecasts for select commodities, including prices for aluminium, copper, gold, iron ore, lead, nickel, palladium, platinum, silver, steel (MEPS Carbon Steel), tin and zinc.

Competitive landscape

The competitive landscape section provides comparative company analyses of detailed financial data for key listed metals firms, ranked in order of market cap (USDmn).

Company Profiles*

Examines the competitive position and short to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects. Details of products and services provide a full overview of each company’s operations.

Sources

The Metals Reports draw on an extensive network of primary sources, such as manufacturing associations, statistical bureaus, government ministries, national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc