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36 comment(s). Last comment by M17 at Jun 29, 2018 11:33 AM
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JayC
1197 posts

Posted by JayC > Jun 1, 2018 11:16 AM | Report Abuse

good article


aslm
379 posts

Posted by aslm > Jun 1, 2018 11:23 AM | Report Abuse

All the steel companies in their QR prospect said the demand is supported by infrastructure projects. Now you said the so called demand is only 1%? Are you kidding?


FutureEyes
95 posts

Posted by FutureEyes > Jun 1, 2018 11:28 AM | Report Abuse

That is because the company management felt the stock price are depressed and wanted to give some good news as a catalyst. They can survive without these projects.


Posted by aslm > Jun 1, 2018 11:23 AM | Report Abuse

All the steel companies in their QR prospect said the demand is supported by infrastructure projects. Now you said the so called demand is only 1%? Are you kidding?


davidkkw79
4162 posts

Posted by davidkkw79 > Jun 1, 2018 11:31 AM | Report Abuse

Where got only 1 % ? At least 60% lar.


FutureEyes
95 posts

Posted by FutureEyes > Jun 1, 2018 11:33 AM | Report Abuse

That is for the construction companies, not steel.

Posted by davidkkw79 > Jun 1, 2018 11:31 AM | Report Abuse

Where got only 1 % ? At least 60% lar.


value88
470 posts

Posted by value88 > Jun 1, 2018 12:05 PM | Report Abuse

Market is irrational to sell-down AnnJoo, LionInd and SSteel.
Look at their earning capability and current ultra-low PE, so mis-match.
The long steel companies have been making good profit in past 2 years without the HSR project, so what's so bad when HSR was cancelled.


vitac
447 posts

Posted by vitac > Jun 1, 2018 12:10 PM | Report Abuse

What so bad, you will know later, big impact on construction, material supply co. like cement, steel cables, etc....


windcloud
1375 posts

Posted by windcloud > Jun 1, 2018 12:19 PM | Report Abuse

good article sharing ….. actually is 0% impact …. haha …. ECRL if tender project, once China companies successfully bid the project, steel will from China side or Alliance Steel …. so I wont take ECRL into the factoring for impact ….. for HSR project ….. implementation stage still far away maybe couple years later …. so who know couple years later HSR will put on the table again ….

For steel companies, should buy on dip ….. 1st choice go for lionind …. haha


probability
9956 posts

Posted by probability > Jun 1, 2018 12:21 PM | Report Abuse

where got so much steel on cables? Its copper la!

look at this way...

When you have no HSR or ECRL...more cars and public transport on the road...

Cars and Buses made of what? Plastic kah?

Its so easy to fill up the entire highway lengths with transport vehicles....easy to do the maths on steel required on these new transport versus a few trains functioning for the entire HSR


probability
9956 posts

Posted by probability > Jun 1, 2018 12:23 PM | Report Abuse

In a nut shell, scrapping HSR and ECRL will only drive demand in other type of transportations and infrastructure which consumers even more steel to cater the logistics need of Malaysians.

enough of cerita dongeng of these IBs...


probability
9956 posts

Posted by probability > Jun 1, 2018 1:33 PM | Report Abuse

Even if you double the below figure considering the reinforcement steels for the concrete supports required, it only comes to about 280 tonnes max per km!

https://www.quora.com/How-much-steel-is-required-for-1-km-of-high-speed-rail

" a quick google search suggests that typical steel rail cross sections weigh between 40-70kg/m (26-48lb/ft) so for a kilometer of rail, we are looking at 40,000kg to 70,000kg. Of course a train requires two rails. This means a kilometer of rail will require about 80,000kg to 140,000kg of steel for the rail. This does not account for an bridges or other structural steel. but for flat ground rail should be a good ballpark estimate of the amount of steel required."


qqq3
9796 posts

Posted by qqq3 > Jun 1, 2018 2:07 PM | Report Abuse

but u still don't know whether they will maintain their level of profits......


qqq3
9796 posts

Posted by qqq3 > Jun 1, 2018 2:08 PM | Report Abuse

u can read this 10 times but u still don't know whether they will maintain their level of profits......


probability
9956 posts

Posted by probability > Jun 1, 2018 2:12 PM | Report Abuse

ANNJOO already clearly mentioned, current rise in Electrode costs and Scrap steel is highly advantages to its BOF business.

LIONIND is exporting its Iron (not steel) produced from Antara Steel.

why should there be any significant impact on margin?

when China is continuously reducing its steel output.


probability
9956 posts

Posted by probability > Jun 1, 2018 3:36 PM | Report Abuse

https://www.thestar.com.my/business/business-news/2018/06/01/malaysian-steel-aluminium-firms-face-low-impact-from-us-tariff/


PlsGiveBonus
3817 posts

Posted by PlsGiveBonus > Jun 1, 2018 3:40 PM | Report Abuse

Not shocking you say 1%
If say 25% i very shock.
:)


PlsGiveBonus
3817 posts

Posted by PlsGiveBonus > Jun 1, 2018 3:43 PM | Report Abuse

Actually should say it is 0.001% more shock to me more good


FutureEyes
95 posts

Posted by FutureEyes > Jun 1, 2018 8:28 PM | Report Abuse

If government help local Long steel makers just to capture market share by another 5% from those import figures of 2,500,000 tonnes per annum for Long steel alone (refer MISIF 2016 chart above), it is like having 3 x (HSR + ECRL) new projects in Malaysia.


Warn3r
485 posts

Posted by Warn3r > Jun 1, 2018 10:10 PM | Report Abuse

Thanks for doing the maths. You did miss out the stations, but I’d bet that the buffer you built into your calculation for the tracks more than covered for the steel usage in building the stations.

The sad fact is that, the vast majority doesn’t know how to quantify. Ppl who don’t understand things get panic easily.


calvintaneng
26240 posts

Posted by calvintaneng > Jun 1, 2018 10:21 PM | Report Abuse

Long Steel Players Bull Run now over.

SSteel, Masteel, AnnJoo, Lionind as well as Prestar.

With Project after Project cancelled the demand will shrink.

Same goes for all cement counters.

Today I bought cement at Rm13.50 for a 50kg bag.

This was Year 2008 prices - 10 years ago. At its peak I bought one bag of cement for Rm20.00 (48% higher)

SO BOTH LONG STEEL & CEMENT STORY NOW OVER. BETTER SELL ALL AND GET OUT!!

The Good Ones Are Flat Steel

Flat Steel as Opposed to Long Steel for Infrar works cater to consumers

As GST will be scrapped this June to Sept 2018 there will be a rise of demand for Cars, Fridge, TV panels & all things made for consumers

Flat steel stock like CSCSteel will be fantastic as it produce Flat Steel Sheets for Car Roof, Doors, Bonnets, Fridge Doors & TV panels.

Good luck


FutureEyes
95 posts

Posted by FutureEyes > Jun 1, 2018 10:25 PM | Report Abuse

Thanks for pointing out Warn3r. There is definitely enough buffer.


Double it if you want but it never comes any where close to these figures:

https://www.reuters.com/article/us-china-steel/china-aims-to-meet-2020-target-for-steel-capacity-cuts-this-year-warns-on-resumption-idUSKBN1FR10M

China shut down 115 million tonnes of steel capacity between 2016 and 2017, and closed 140 million tonnes of induction furnaces that use scrap metal to make steel.


Analysis: China to continue steel capacity cuts in 2018
Mar 07

https://news.metal.com/newscontent/100784544/analysis%3A-china-to-continue-steel-capacity-cuts-in-2018

China will cut another 30 million mt of steel capacity in 2018 and intensify efforts to liquidate bankruptcies, reorganise so-called ‘zombie firms’, and resettle retrenched workers and debt, Premier Li Keqiang announced at the National People’s Congress on Monday March 5.

China plans to cut steel capacity by 100-150 million mt by 2020


FutureEyes
95 posts

Posted by FutureEyes > Jun 1, 2018 10:30 PM | Report Abuse

30 Million tonnes per annum steel capacity reduction in China for 2018 alone versus Total 3.5 Million tons of local Malaysian production per annum.

The magnitude of regional demand outpacing the shrinking supply speaks very loud and clear from above figures.


antidebt
313 posts

Posted by antidebt > Jun 1, 2018 10:35 PM | Report Abuse

Cement producer already dead. Next to follow is steel ?


Warn3r
485 posts

Posted by Warn3r > Jun 2, 2018 10:33 AM | Report Abuse

FutureEyes, it’s sad to see that after you doing some maths, it didn’t occur to some people that they need to re-think the real impact, in the context of macro and local environment.

Admittedly, cancellation of mega projects has its secondary effect on other private developments. But trying to conclude the current / future market of long steel based on a personal one-off experience in buying one bag of cement... is just pure stupidity.


moneypedia
3655 posts

Posted by moneypedia > Jun 2, 2018 10:40 AM | Report Abuse

great article


probability
9956 posts

Posted by probability > Jun 2, 2018 12:39 PM | Report Abuse

Guan Eng on HSR: 'You can get something... for half the price.'

https://www.thestar.com.my/news/nation/2018/06/02/guan-eng-on-hsr-you-can-get-something-for-half-the-price/

Asked if the economic benefits outweighed the cost of the rail link, Lim replied: “Is it worth it? You can get something for cheaper, for half the price.”

“What we are seeing are projects that are double the market price,” Lim said.


pakatan_harapan2
1906 posts

Posted by pakatan_harapan2 > Jun 2, 2018 12:44 PM | Report Abuse

How many universities, hospitals, etc for 1 HSR?


probability
9956 posts

Posted by probability > Jun 2, 2018 12:53 PM | Report Abuse

Appears like the project cost estimators intentionally over estimated the material requirements so that they can find loop holes to syphon money.

Actual material & construction engineering plus labor costs could be just 20%...remaining 80% all goes to BN cronies.


probability
9956 posts

Posted by probability > Jun 2, 2018 12:59 PM | Report Abuse

Like FutureEyes estimated, what is 116,000 ton per annum local steel demand reduction compared to 30,000,000 ton permanent steel output reduction for 2018 alone by China?

Divide the 30,000,000 ton (reduced output by China) by 10 surrounding countries, you still get 10,000,000 ton per country reduction in competitive supply.


InvestWin
69 posts

Posted by InvestWin > Jun 2, 2018 4:22 PM | Report Abuse

HSR and ECRL steel tracks for sure are imported. Our Malaysian steel factories do not make this type of steel. So, wheather projects on or off, no effect on our steel industrial. But, it has impact on our debts. Better scrap these projects.


tecpower
3539 posts

Posted by tecpower > Jun 2, 2018 4:28 PM | Report Abuse

Value investors should be interested in buying steel stocks on this low price level.


qqq3
9796 posts

Posted by qqq3 > Jun 2, 2018 4:33 PM | Report Abuse

y tecpower > Jun 2, 2018 04:28 PM | Report Abuse

Value investors should be interested in buying steel stocks on this low price level.
=============================


value investors should start from business sense.....not last year profits.


tecpower
3539 posts

Posted by tecpower > Jun 2, 2018 4:40 PM | Report Abuse

A 10-20% return is an easy target.


tecpower
3539 posts

Posted by tecpower > Jun 3, 2018 12:25 AM | Report Abuse

http://www.sunsirs.com/uk/prodetail-927.html

China rebar price rebounded nicely.


tecpower
3539 posts

Posted by tecpower > Jun 4, 2018 12:08 AM | Report Abuse

Warren Buffett Strategy: Long Term Value Investing
http://www.arborinvestmentplanner.com/warren-buffett-strategy-long-term-value-investing/

Long Term Value Investing
Benjamin Graham taught the long term value investing strategy of purchasing stocks at a price below their intrinsic value; then holding them until their price reflects the real value of the company. Warren Buffet described Benjamin Graham’s Intelligent Investor as “by far the best book on investing ever written”.


M17
23 posts

Posted by M17 > Jun 29, 2018 11:33 AM | Report Abuse

FutureEyes, does that mean the steel guys are even more reliant on property development which is also slowing down?

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