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Good prospects ahead for Malaysian steel sector – Ann Joo MD Mr Lim

Steel News - Published on Wed, 03 Jan 2018

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The Edge reported that Malaysian steel industry had a bumper year in 2017. Against the backdrop of a production cut in China and rising domestic demand, the sector’s prospects look likely to remain rosy. However, the potential hike on natural gas prices could dampen the outlook to certain extent, according to Ann Joo group managing director Datuk Lim Hong Thye.

Lim said the impact of the most recent gas price hike on industry players can vary significantly. He said “These factors are not just limited to the processes involved in the business, technology used and products manufactured. With the new gas tariff in place, steel players’ ability to pass on the additional costs to consumers will be tested.”

He told “A typical long product steel mill using full scraps as raw materials in its EAF in producing billets and natural gas as fuel for its rolling mill will consume about 2.5mmbtu per tonne of rebars produced.”

For Ann Joo, Lim said due to its investments in blast furnace (BF) which produces hot metal and BF gas, the group is able to significantly reduce natural gas consumption through the utilisation of hot metal as raw material in its EAF and utilisation of BF gas as fuel in its rolling mills.

He said “Whether 2018 is going to be good or bad depends on many factors, which also include the ability to pass on the impact of the increase in natural gas tariff, and price movements of raw materials. Domestic and regional demand also plays significant roles.”

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Posted By : Nanda Koijam on Wed, 03 Jan 2018
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