Sunday, March 11th, 2018


RWE transforms German energy industry in asset swap with E.ON, Innogy

ESSEN, March 11 — Germany’s top utilities announced a multi-billion-euro revamp, with RWE agreeing to sell control of Innogy to rival E.ON in return for renewable assets, in the biggest overhaul of the sector since the country moved to exit…

Malaysia unfazed by US import tariffs on steel, aluminium

PETALING JAYA: While Malaysia may not see much of an impact from the United States’ move to go ahead with steel and aluminium import tariffs, the move is likely to trigger a surge in steel prices.

US President Donald Trump signed off on the implementation of 25% tariff on steel imports and 10% for aluminium last week, fanning an outburst from industry players and critics from across the world and within the US alike.

Maintaining his earlier stance, Malaysian Iron and Steel Industry Federation (Misif) president Datuk Soh Thian Lai told SunBiz that the impact on Malaysia will be minimal given the relatively small volume of steel exports.

Malaysian steel exports, which stood at about 96,000 tonnes, accounted for only 0.2-0.3% of the total US steel imports for 2017 of between 34 million and 37 million tonnes.

Soh said Malaysia will still be able to find an alternate market to the US to export this 96,000 tonnes.

“Most probably steel prices in US will increase fast enough in the near term and importers will still be able to import even with the 25% duty,” he added.

In line with that, scrap prices are likely to see a rise, given that consumption of the material will become more domestic centric, hence limiting exports.

“Scrap prices will increase because now the US could use more scrap internally instead of exporting. The US in actual fact is a net exporter of scrap, and with this trade act imposed, this could raise steel prices not only in the US but also countries importing scrap from them especially Malaysia and Asean countries,” he explained.

Majority of Malaysia’s scrap, which could not be quantified, he said, is imported, with the US being one of the major importers.

On the next course of action, Soh said Misif has written of its grouses to the US embassy and the Ministry of International Trade and Industry (Miti).

“We will follow up with US Embassy and Miti on this. Since the US has allowed an exemption on Canada and Mexico. We will ask the government to bring this up to the US, for Malaysia to be exempted,” he added.

Echoing Soh’s sentiment on surging steel prices, Barnabas Gan, economist at OCBC Bank, said while trade barriers will spike steel and aluminium prices, it could also result in job casualties for the steel and aluminium-consuming industries of the US.

“Eventually, we note that the trade tariffs without exemptions will likely do more harm than good, both to the US economy as well as impeding global growth and trade activities. Even in the absence of trade retaliation, the tariffs would threaten many jobs in the US pertaining to aerospace, automobile, manufacturing and construction industries, while benefiting steel and aluminum makers,” he noted.

Consumers would then face higher inflationary pressures, and thus adversely affect consumer spending and overall disposable income levels. Moreover, the bleaker outlook for the said industries could worsen investor confidence, and thus dissuade investment spending into the US,” he added.

Meanwhile, Ambank Research said that the move could potentially reduce US steel imports by 13.3 million tonnes and Malaysia on its end could see a reduction of between 48,000 and 49,000 tonnes. Similar to Gan, the research house said the tariffs could have a knock-on effect on steel-consuming industries.

In line with this development, AmBank noted that the US dollar is expected to weaken, working to strengthen the ringgit and heighten fears of possible trade war.

The share price of Tatt Giap Group Bhd which exports steel products to the US, fell 3.33% to close at 14.5 sen on Friday, along with Mycron Steel Bhd, which fell 1.15% to 43 sen.

Steel counters which saw gains at market close on Friday were Ann Joo Resources Bhd Resources, up 0.29% to RM3.47; Malaysia Steel Works (KL) Bhd, 1.05% to 96.5 sen; CSC Steel Holdings Bhd, 2.88% to RM1.43; and Atta Global Group Bhd, 0.55% to 92 sen.

Leon Fuat Bhd was unchanged at 79.5 sen.

China says trade war with US will bring disaster to global economy

BEIJING: Any trade war with the United States will only bring disaster to the world economy, Chinese Commerce Minister Zhong Shan said today, as Beijing stepped up its criticism on proposed metals tariffs by Washington amid fears it could shatter global growth.

After pressure from allies, the US has opened the way for more exemptions from tariffs of 25% on steel imports and 10% on aluminium that US President Donald Trump set last week.

On Saturday, the European Union and Japan urged the US to grant them exemptions from metal import tariffs, with Tokyo calling for “calm-headed behaviour”.

But the target of Trump's ire is China, whose capacity expansions have helped add to global surpluses of steel. China has repeatedly vowed to defend its “legitimate rights and interests” if targeted by US trade actions.

Zhong, speaking on the sidelines of China's annual session of parliament, said China does not want a trade war and will not initiate one.

“There are no winners in a trade war,” Zhong said. “It will only bring disaster to China and the United States and the world.”

China can handle any challenges and will resolutely protect its interests, but the two countries will continue to talk, he said.

“Nobody wants to fight a trade war, and everyone knows fighting one harms others and does not benefit oneself.”

Trump's announcement on tariffs underlined concerns about rising US protectionism, which has sparked bouts of turmoil in global financial markets over the past year as investors feared
a damaging trade spat will shatter a synchronised uptick in world growth.

China's metals industry issued the country's most explicit threat yet in the row, urging on Friday for the government to retaliate by targeting US coal – a sector that is central to Trump's political base and his election pledge to restore American industries and blue-collar jobs.

The US is the world's biggest importer of steel, purchasing 35 million tonnes of raw material in 2017. Of those imports, South Korea, Japan, China and India accounted for 6.6 million tonnes.

Trade tensions between China and US have risen since Trump took office. China accounts for only a small fraction of US steel imports, but its massive industrial expansion has helped create a global glut of steel that has driven down prices.

The dispute has fuelled concerns that soybeans, the US' most valuable export to the world's second largest economy, might be caught up in the trade actions after Beijing launched a probe into imports of US sorghum, a grain used in animal feed and liquor.

Zhong said US official trade deficit figures had been overestimated by about 20%, and in any case would be a lot lower if the US relaxed export restrictions on some high-tech goods.

He also reiterated a previous pledge that China would lower import tariffs on consumer goods including automobiles, as part of an effort to boost domestic consumption.

Trump believes the tariffs will safeguard American jobs, though many economists say the impact of price increases for users of steel and aluminium, such as the auto and oil industries, will destroy more jobs than curbs on imports create.

Nonetheless, there is growing bipartisan consensus in Washington, and support within some segments of the US business community, for the US government to counter what are
seen as Beijing's predatory industrial policies and market restrictions on foreign firms.

Trump's administration has said the United States mistakenly supported China's membership in the World Trade Organisation in 2001 on terms that have failed to force Beijing to open its economy.

Diplomatic and US business sources say the US has frozen a formal mechanism for talks on commercial disputes with China because it is not satisfied Beijing has met its promises to ease market restrictions. – Reuters

Trump’s trade policies jeopardise jobs and prosperity, says German minister

BERLIN, March 11 — US President Donald Trump’s tariffs on steel and aluminium imports will cost jobs and growth, German Economy Minister Brigitte Zypries told Reuters today, adding that Europe and other free traders should not let themselves…

Perwaja receiver and manager in midst of conducting valuation

PETALING JAYA: The receiver and manager (R&M) of Perwaja Steel Sdn Bhd, Lim Tian Huat of insolvency firm Messrs Rodgers Reidy & Co, is in the midst of conducting valuation for the building and assets of the company which went into receivership in January this year.

On Jan 24, 2018, RHB Bank Bhd, one of the chargees, appointed Lim, who is Rodgers Reidy director of Malaysia and Singapore offices, as R&M of the properties of Perwaja Steel.

“R&M to sell assets of Perwaja. Still conducting valuation of the land and building and all assets of the company,” Lim told SunBiz in an email reply.

According to its filing with the Companies Commission of Malaysia, Perwaja Steel has 22 unsatisfied charges out of 40 charges. A charge is an interest or right which a lender or creditor obtains in a property of a company by way of security that the company will pay back the debt.

The company has current and non-current assets of about RM931.73 million and current liabilities of RM2.53 billion.

Perwaja Steel was incorporated on Oct 11, 1989. It ceased business operations in the manufacturing and trading of direct reduction iron, steel billets, beam blanks and blooms in 2013.

Its parent Perwaja Holdings was delisted from Bursa Malaysia Securities on May 30, 2017 after four years of being a Practice Note 17 (PN 17) company. In February 2017, a planned RM1.8 billion injection to revive the group’s plant in Kemaman, Terengganu, by Chinese conglomerate Tianjin Zhiyuan Investment Group Co Ltd lapsed.

For the nine-month period ended March 31, 2017, Perwaja’s net loss stood at RM181.33 million versus RM294.95 million in the same period a year ago. Revenue fell 40.6% from RM498,000 to RM296,000.

Directors Tan Sri Pheng Yin Huah and Datuk Henry Pheng Chin Guan declined to comment while substantial shareholder Tan Sri Abu Sahid Mohamed did not reply to queries from SunBiz.

Yin Huah and Chin Guan are also directors of Kinsteel Bhd, which owns some 28% of Perwaja Holdings, which in turn wholly owns Perwaja Steel.

Last Friday, the court postponed the decision to stay the winding-up order against Kinsteel and its wholly owned subsidiary Kin Kee Marketing Sdn Bhd to March 16, 2018.

Duar Tuan Kiat of Messrs Ernst & Young has been appointed as the liquidator of Kinsteel, and is empowered to take into custody or under his control all the properties to which Kinsteel is or appears to be entitled.

Trading in Kinsteel shares has been suspended since Jan 5, after the regulator rejected its application for a further extension of time to submit its regularisation plan. The decision to delist the company has been deferred pending its appeal along with the submission of a new restructuring plan.

Trump ‘clarity’ on tariffs not what EU was looking for

BRUSSELS, March 11 — Hours after European Union trade chief Cecilia Malmstrom said she had “no immediate clarity” on whether the bloc will be let off the hook from planned US tariffs, President Donald Trump laid down his conditions and…

Millions of music hits may soon be for sale. Will Sony buy them?

LOS ANGELES, March 11 — Sony Corp held preliminary talks to acquire a majority stake in EMI Music Publishing, according to people with knowledge of the matter, as its Abu Dhabi-based owner seeks to cash in on the booming market for streamed…

TNB’s solar plant project over 50pc complete

SEPANG, March 11 ― The nation’s first large-scale solar (LSS) project being developed by Tenaga Nasional Bhd (TNB), is now over 50 per cent complete since construction started in July last year. In a statement today, TNB Vice President (Energy…

China: Trade war with US will only bring disaster to global economy

BEIJING, March 11 ― Any trade war with the United States will only bring disaster to the world economy, Chinese Commerce Minister Zhong Shan said today, as Beijing stepped up its criticism on proposed metals tariffs by Washington amid fears it…

EU, Japan start push for exemptions from Trump tariffs

BRUSSELS, March 11 ― The European Union and Japan urged the United States yesterday to grant them exemptions from metal import tariffs, with Tokyo calling for “calm-headed behaviour” in a dispute that threatens to spiral into a trade war….