Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Malaysia-based CSC posted a net profit of RM15.43mn ($3.7mn) for Q2 FY2021 (April-June) compared to net loss of RM2.16mn in the prior year supported by higher sales volumes and product margins. Sales volumes of steel in H1 FY2021 rose by 43pc to 213,355mt from a year ago.


CSC Malaysia said in its outlook for H2 FY2021 that the domestic steel market could still be subdued after the resumption of operations on easing of COVID-19- related restrictions. Driven by the imbalance of global supply and demand, domestic steel prices are expected to remain at a commanding level, it added.  


The company attributed higher net profit in Q2 to improved sales volumes and product margins. Sales of steel in H1 FY2021 rose by 43pc to 213,355mt against 149,200mt in H1 FY2020.  


In Q2 FY2021, (Apr-June’21), total revenue rose by 167pc to RM203mn, from RM121.4mn prior year. Despite high prices, improving demand and comparatively less impact of COVID-19-related restrictions this year, sales volumes H1 2021 increased from H1 2020.  


There was less supply and transport disruption during the Movement Control Order 3 this year compared to MCO 1 a year ago. The steelmaker operated at full capacity during the first two months of June quarter.  


During H1, the group’s net profit improved by 13 times to RM37.26mn, from RM2.85mn during the same period prior year. Meanwhile, revenue surged by 82.5pc to RM740.43mn from RM405.68mn in the prior year.  


Malaysia’s finished steel prices have increased steadily, driven by the global steel, raw material supply constraints and a smaller impact from the MCO operations halt on productions in H1 FY2021.  


On the other side, the country implemented stricter lockdown from early June to mid-August period, affecting the nationwide steel supply chains and downstream related industries.  


Steel industry in Malaysia has remained under non-essential industries and faced restricted operations. Auto sales could stay below expectations during festival period this year as most OEM’s are facing acute semiconductor chip shortages.


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