It is reported that CSC Steel Holdings Bhd is expected to face a general slowdown on its performance due to the slowing global economy, inconsistent raw material supply and intensifying local competition.
OSK Research Sdn Bhd in a report said that "A narrowing price spread for hot rolled coils and cold rolled coils caused by the sovereign debt crises in the European Union and the US could bring down the final demand and price for the products."
The research house further added that "The inconsistent supply of HRC by a sole local producer could possibly prolong and subsequently affect CSC Steel's production planning and this progress was in line with our expectations."
CSC Steel had since placed emphasis on production efficiency as its management recognized the lacklustre outlook. OSK Research noted that the demand for galvanized iron and pre painted GI would hold up better compared with CRC, riding on the back of increased orders from its key customers involved in manufacturing building materials, which would ultimately lead to a higher margin for the products.
With intensified competition in the local market as new CRC lines entered in the past few years, OSK Research noted that CSC Steel had since increased its exports of CRC to 20% from a previous five per cent for 2010, reaping its earnings from overseas markets instead.
(Sourced from www.theborneopost.com)
