The firm said construction players had to face higher price
pressures when steel bar prices had risen for 19 consecutive months to its peak
of RM3,901.81 per tonne in June last year.
KUALA LUMPUR:
The ongoing decline in steel bar prices remains a positive development for
construction players as they have been taking on higher price pressures over
the past two years, said MIDF Research.
The firm said
construction players had to face higher price pressures when steel bar prices
had risen for 19 consecutive months to its peak of RM3,901.81 per tonne in June
last year.
"On the
flip side, we expect cement prices to remain elevated at current levels and we
do not discount the possibility of further hikes, especially in the Peninsula
due to elevated coal prices and the impact of higher electricity surcharge from
January to June this year.
"In
Sarawak, the sole cement manufacturer Cahya Mata Sarawak raised prices by an
average of 10 per cent in February 2o22 for the first time in six years and has
no plans for further increases, as the group seeks to focus on improving its
plant efficiency, procurement and logistic arrangements to better manage its
margins," said its analyst Royce Tan.
MIDF Research
said prices of steel bars maintained its downward trend in December last year,
marking its sixth consecutive month of decline.
Based on the Department of Statistics (DOSM) data released yesterday, the
average prices of five types of mild steel bars and four types of high tensile
deformed bars it tracked saw a reduction of 0.6 per cent month-on-month to
RM3,602.94 per tonne.
On a
year-on-year (YoY) basis, it was still an increase of 7.8 per cent YoY but at
its slowest pace since March 2021. This was in line with the global decline in
iron ore and steel prices.
"Average
steel bar prices in the peninsula were down 0.5 per cent MoM lower to
RM3,135.05 per tonne. The central region saw the highest decline by 1.2 per
cent MoM to RM3,335.48 per tonne.
"In East
Malaysia, average prices retreated 0.7 per cent MoM to RM3,836.88 per tonne,
with the highest decline recorded in Tawau by 1.6 per cent to RM4,070.92,"
MIDF Research said.
As for cement
prices, the binding substance averaged at RM21.04 per 50 kilogram bag in
December, up 0.3 per cent from the previous month from RM20.98, its
second straight month of increase.
The east of
the peninsula posted the strongest increase by 3.6 per cent to RM19.92 while
Sabah and Sarawak, average prices saw a marginal decline by 0.4 per cent to
RM22.19.