Malaysian CSC Steel Swings to Red in Jul-Sep’22 Quarter
Strategic Research Institute
Published on :
23 Nov, 2022, 6:12 am
Malaysia’s leading producer of steel pipes, cold rolled coils, steel sheets, and galvanized steel products CSC Steel Holdings CSC Steel posted MYR 14.2 million net loss in July-September 2022 quarter versus a MYR 10 million net profit a year earlier despite revenue being 80% higher at MYR 363.2 million. For the nine months of 2022, net profit dropped 68% to MYR 14.94 million despite revenue rising 42% to MYR 1.338 billion.
CSC Steel expects that the bearish view on the global steel market will likely be prolonged, as steel prices and demand are unlikely to see any favorable improvement, according to Bhd. CSC Steel said “Europe’s energy crisis was forcing the manufacturing industry across the continent, including steel mills, to close down. Also, the Yuan is likely to continue depreciating, which stimulates exports and consequently affects local steel prices as the weaker Yuan makes Chinese goods cheaper in the global market place.”
CSC Steel said “Following the depreciation of Asian currencies and the sturdy coal prices in winter, steel mills appear to have no room for any price adjustment under the pressure of high raw material costs. Most of the Asian steel mills in the third quarter saw weak performances, as they were affected by significant sales decline and lower inventory prices.”
CSC Steel said “After experiencing a low order volume in the third quarter, Malaysia’s domestic sales volume and prices have shown a slight recovery at the beginning of the fourth quarter mainly due to the ringgit’s depreciation, the high import cost and the improvement in labor supply.”
CSC Steel added “In the fourth quarter, it is expected that the United States will continue to raise interest rates, and thus, the ringgit will continue to be weaker against the greenback, resulting in higher import costs. It is uncertain whether the downstream and steel market is able to absorb the higher costs.”
In December 2000, China Steel Corporation of Taiwan had acquired CSC Steel, formerly known as Ornasteel Enterprise. Since then, both CSC Steel and Group Steel have been fully operated under the management of CSC. The main products of CSC Steel include pickled and oiled steel coils, cold rolled steel coils, galvanized steel coils and pre-painted steel coils.