Chinese steel and iron ore futures tumbled to multi-month lows earlier this month as market sentiment turned bearish on demand outlook.
PETALING JAYA: Shares of steel companies on Bursa Malaysia spiked in afternoon trading on Thursday as steel output may drop in coming months.
Bloomberg reported that steel output may drop in coming months as Asia’s top economy presses ahead with supply-side reforms. Hebei province, the center of China’s mammoth steel industry, has plans that will allow for winter output cuts of as much as 50% to reduce pollution.
Companies such as Southern Steel, Ann Joo
, Malaysia Steel Works (Kl) and Press Metal are among the actively traded counters on Bursa Malaysia.
Southern Steel jumped 7.17%, or 17 sen to RM2.54, its highest since late 1997, with 2.47 million shares exchanged hands.
Ann Joo Resources rose 4.35% , or 16 sen to RM3.84, its all time high, with more than two million shares traded. The stock rose about 23% in the past month.
Masteel added 12 sen to RM1.68 while Lion Industries Corp rose 0.5 sen to RM1.47,
Reuters reported higher prices have also been fuelled by concerns of capacity curbs during the coming winter after the Ministry of Environmental Protection (MEP) pledged to reduce hazardous pollutants in the country’s north, including key producing province Hebei, by halving steel output by up to 50%.
Some inspection teams have already been sent to eight provinces in August, according to the MEP.
China’s stockpiles of rebar, a construction steel product, rose to 3.88 million tonnes by the end of August.
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