Thursday, September 27th, 2018
SUBANG JAYA: The Malaysian Iron & Steel Industry Federation (Misif) is seeing a slowdown in steel demand this year due to the review of infrastructure projects by the government, said Misif president Datuk Lim Hong Thye.
He personally estimated a 5% slowdown in the demand for construction steel this year.
“This year, we see steel demand slowing mainly because of our domestic issues. The government is reviewing infrastructure projects, which slows down demand. The direct impact from US President Donald Trump’s actions is not that serious (on the slowdown in steel demand),” Lim told a press conference at the 13th Conference on Status & Outlook of the Malaysian Iron and Steel Industry today.
He said many steel producers have prepared for the expected growth in domestic demand this year but suddenly demand slowed, causing producers to turn to export. Lim hoped that local demand can increase as domestic sales provide the highest margin to producers, saving from shipping and logistics costs compared with export.
”While businesses are cautious and adopting a wait-and-see approach from the forthcoming Budget 2019, we hope that mega government-led infrastructure development and property projects can be approved for commencement soon, as catalyst for a buoyance steel consumption in the country. The third national car project to build a regional automobile also adds optimism to the steel sector as well,” said Lim.
Malaysia’s steel consumption was 9.4 million MT in 2017. Misif is optimistic that the country can achieve higher growth beyond the “physchological threshold” of 10 million MT, a mark that Malaysia consistently achieved for three years prior to 2017. Malaysia’s steel consumption is projected to grow to 11.7 million MT and 12.4 million MT by 2020 and 2025 respectively, amid global challenges and disruption.
“Currently due to domestic and international issues, steel price in Malaysia is at a suppressed level. We don’t see any more room for steel price to go down. When the business sentiment improves, we expect the price will move to a fairer level compared to the international price,” said Lim.
Describing the global trade war as a “double-edge sword”, Lim said the situation can be an opportunity for Misif members. With US slamming a 50% tariff on Turkish steel, he said Malaysian steel can be more competitive than Turkey in terms of exports to US.
Deputy International Trade and Industry Minister Dr Ong Kian Ming instead urged domestic steel producers to diversify and move from construction-centric steel producers towards producing specialty steel and higher value added steel with high impact growth such as automotive, electrical & electronics, machinery & equipment and oil & gas.
He said the government urged the industry to consider consolidation, merger & acquisitions and partnerships with strategic parties, and proposed that the industry work with government agencies to identify the required technology, business opportunity and partnerships with sector-specific companies.
Ong also said incentives for Industry 4.0 will be included in Budget 2019, adding that the government will roll out the National Industry 4.0 Blueprint this year to enable digital transformation of the manufacturing and related services sector.
PETALING JAYA: Malaysians expressed a record high of 42% satisfaction rating for the local property sector in the first half (H1) of 2018 post 14th general election, according to PropertyGuru consumer sentiment survey.
The H1 2018 survey, which measures property sentiments and expectations around the property market, saw 955 respondents in Malaysia and more than 1,900 respondents across Southeast Asia.
The record high, which comes even as Malaysia continues to face uncertainties attributed to various macro-economic and socio-political issues, is a marked improvement from just 25% in 2015 and 38% in H2 2017, the online property portal said in a statement.
PropertyGuru Malaysia country manager Sheldon Fernandez said he believes that the rise in sentiment to breach the 40% mark is indeed a reflection of changing perceptions among Malaysians towards the country and thereby the real estate market.
“We have been tracking consumer sentiment for years and the present level of 42% is unprecedented. It doesn’t appear to be a temporary effect or knee-jerk reaction. Clearly, more Malaysians are expressing optimism for the property sector and wish to transact.
“People who previously were thinking of relocating overseas have changed their plans or have deferred them. Others who postponed home purchases are beginning to explore both primary and secondary markets again. Even Malaysians abroad are considering returning home,” Fernandez added.
PropertyGuru added that the rise in positive consumer sentiment is further confirmed by more than half of those polled expressing desire to purchase a property or properties within the next six months.
Of these, it said 37% are looking for homes priced between RM300,000-RM500,000, whereby 27% are looking at below RM300,000.
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