Though demand for longs started to revive in the third quarter this year in Malaysia, most local rebar producers have posted lower financial and operational results, while the position of flat steel re-rollers has improved.
Southern Steel and Masteel, long steel manufacturers in Malaysia, have both posted 30 percent declines in revenue in the quarter ended September 30 in comparison to the same period last year. At the same time, Southern Steel posted a loss of MYR 46 million ($11 million), while the company had a small profit compared to the third quarter of 2018. Masteel’s net profit dropped by 19 percent year on year to MYR 2.09 million ($500,000). Both companies have said in their reports that the price downtrend and sales volume declines have been the main reasons for the weaker financial results. The long steel market in Malaysia faced oversupply since Alliance Steel started operations in 2018 and, even though local demand has started to revive since October, the market has remained imbalanced.
The performance of CSC Steel Holdings, a flat steel producer in Malaysia, has been much better. The group’s revenue increased by 5.1 percent year on year in the third quarter this year, while its profit before tax reached MYR 12.7 million ($3 million), an increase of 240 percent year on year due to “improved margin underpinned by both the increase in domestic sales and favorable raw material cost, as well as reduction in production cost as a result of higher capacity utilization,” the company said in its report. Overall sales volumes (mostly CRC, HDG and PPGI produced by the company in Malaysia) increased by 12 percent year on year to 118,318 mt in the July-September period this year.