PRLog (Press Release) – Apr 07, 2011 – The Malaysian steel and aluminium industries are set to sustain a recovery in 2011, lifted by strong domestic demand following the global downturn. In addition, the Malaysian government is financing several projects through the Economic Transformation Programme. However, protectionist measures are likely to benefit mills at the expense of downstream fabricators and manufacturers.
Construction steel consumption declined from a peak of 3.88mn tonnes in 2007 to 3.12mn tonnes in 2009, but saw a rebound in 2010, with BMI estimating growth of 10% to 3.37mn tonnes, reversing much of the decline seen in recent years. In 2011, growth in Malaysian steel consumption will be determined by the speed of implementation of infrastructure projects under the Economic Transformation Programme. The construction sector will be vital to the recovery of the Malaysian steel market as it represents 71% of the country's steel consumption. Government contracts are expected to underpin growth in the steel industry. Malaysia Steel Works (Masteel) expects to increase its turnover from government contracts to 20-25% (from 15%) under the 10th Malaysia Plan. The government has allocated some MYR63bn to 52 large projects, compared to MYR33.1bn under the ninth plan. Output will also be encouraged by a rise in Masteel's production capacity from 450,000 tonnes per annum (tpa) to 500,000tpa.
While a stronger recovery is expected in 2011, with crude steel output growth of 8.9%, the industry is not expected to return to pre-crisis levels of output until 2013 at the earliest. Exports will lead output growth with 19.1% growth to 3.19mn tonnes in 2011. However, domestic demand will be sluggish with finished steel consumption growth of 7.2% to 8.1mn tonnes in 2011, only partially offsetting the decline in recent years. BMI does not believe that growth in demand will be sufficient to prompt a rapid rise in margins over the level seen in 2010, due to regional price volatility and the rising cost of raw materials. Flats consumption, which saw an estimated 5% rise to 4.18mn tonnes in 2010, should pick up pace as sectors such as the automotive industry begin their recovery. This should be boost Malaysian flats producer Megasteel, which has a production capacity of 2mn tpa.
At the same time as the expansion in steel output, investment is being directed towards the aluminium sector. China's Ye Chiu Group is building a secondary aluminium smelter with capacity of 120,000tpa which is due to start operations in H112, while Abu Dhabi's Mubadala Development Company is planning to invest US$7bn in Malaysia's aluminium sector as part of its strategic partnership deal with 1Malaysia Development Berhad (1MDB). Japan's Sumitomo Corporation has also acquired a 20% share in Press Metal Sarawak's new 120,000tpa primary aluminium smelter, which was started up in Sarawak in 2010, with the potential for doubling capacity to 240,000tpa. Most importantly, SALCO announced plans to produce 720,000tpa at the Similajau refinery from 2014. This will be the largest boon to production and is expected to drive output growth, especially as the company expects production to eventually reach 1.5mtpa over the long term. This project will be completed at the same time as the Bakun hydroelectric dam is finished and a deepwater port at in Sarawak is completed.
For more information or to purchase this report, go
0 komentar:
Posting Komentar