OSK Research Sdn Bhd said that the Asian steel market may hold up better in the future than in other parts of the world although demand could be further dampened by a weak economic outlook.

The research firm also expected long steel producers to fare better as governments worldwide cannot avoid carrying out some pump priming activities, which could help spur demand for long steel.

It said in a statement that "On the local front, steel mills are waiting with bated breath the rollout of mega government projects under the Economic Transformation Program which is expected to boost steel demand. However, concerns still linger over its smooth and successful execution."

OSK recently revised lower some of its estimates due to the global economy sluggishness. It said that "We are trimming our fair values across the board as the steel stocks currently offer limited price upside. We are neutral on most counters except Perwaja and Kinsteel, on which we add on a 10% discounted cash flow valuation on their potential in securing the iron ore mine as well as our buy and trading buy recommendations, respectively."

(Sourced from www.bernama.com)