PETALING JAYA: CSC Steel Holdings Bhd
is likely to face near-term pressure from persistent global steel oversupply, weak Chinese demand and rising domestic operating costs, according to TA Research.
The research house said the global steel market remains challenging, with macroeconomic uncertainties and rising regional competition adding to the pressure on steel producers.
“On the domestic front, producers face rising operating costs from higher production costs and the impending implementation of carbon taxation, which could pressure margins in the near term,” it said.
Against this backdrop, TA Research maintained a cautious near-term stance on CSC Steel.
It said the Malaysian steel sector outlook remains “cautiously positive”, supported by ongoing infrastructure projects, industrial expansion and investments in high-value manufacturing.
“However, competition remains intense due to import pressure and external uncertainties, while local steel prices are likely to continue tracking global trends,” it said.
The research house said anti-dumping measures would remain important in protecting local steel producers, particularly with the upcoming expiry review for colour-coated steel coils and cold-rolled coils in October 2026.
Meanwhile, TA Research expects the global steel market outlook to remain mixed in the second half of 2026, shaped by persistent overcapacity, evolving trade policies and geopolitical uncertainties.
“China’s subdued domestic demand amid continued property sector weakness remains a key overhang, although supply-side discipline and tighter export management could help moderate overall steel production output,” it said.
Nevertheless, it expects elevated Chinese exports to sustain competitive pressure in international markets.
On the other hand, it said resilient infrastructure spending and industrial activity in the United States and Europe, supported by trade protection measures and carbon regulations, should provide some stability to regional steel demand and pricing.
TA Research said CSC Steel would continue to maintain a “disciplined yet opportunistic” approach, focusing on cost efficiency, prudent inventory management and continued progress on decarbonisation initiatives.
“These efforts aim to enhance earnings resilience and competitiveness as market conditions gradually stabilise,” it added.
TA Research said CSC Steel’s first half ended June 30, 2026 (1H26) core net profit (CNP) of RM36.4mil was broadly in line with its expectations, accounting for 53.1% of its full-year forecast.
It said revenue grew 3.1% year-on-year, driven mainly by a 12% increase in sales volume, which more than offset lower average selling prices across all steel products.
The research house said CNP rose 5.5%, supported by lower input procurement costs from improved material cost controls and the strengthening of the ringgit against the US dollar.
“CSC Steel’s balance sheet remains solid, with no borrowings and a net cash position of RM419.7mil,” it added.
Given the in-line performance, it kept earnings forecasts unchanged. It also maintained a “buy” call on the stock, with an unchanged target price of RM1.89, based on a price-to-earnings multiple of 10 times.
