 | « Reply #57 on: Today at 04:34:01 PM » | 0  Quote |
ya, agree -- like ijmland... move very fast and also kena trap fast.....
I just want to share something with you. Last night I watched CNN news reporting on Australia condition. The bad weather that causes Queensland flood since Dec 2010, also disrupts Australian top 4 outputs, i.e. Coal, Wheat, Steel, Sugar. Coal is also needed to produce Steel in many countries, like China. So with this news, sure it drives the steel price up.
However if you follow the past history of Steel makers, BHP Billiton and Rio Tinto, you will realise that it is an international affair between China & Australia. China is the biggest steel consumer. Since China interrupts the Steel price which is controlled by Australia companies, the price of steel dropped from a high of 3,400 RM/tonne, to 2,500 RM/tonne. Later mid 2010, Australian gov imposed 30% mining tax on the companies, which send the steel price further down. It hit the bottom in Oct, I read the newspaper saying the High tensile steel bar costs somewhere around RM1600 per tonne.
If you plan to buy Steel maker company, remember the ceiling price of steel product is controlled by the government called the Goverment Controlled Price (GCP). This is to protect many government linked projects. Many local steel makers prefer to export their products to oversea to fetch a higher price. Master Builders Association Malaysia MBAM is calling a ban to export building materials such as steel bar and cement to oversea. I am only afraid that, the profit margin is squeezed thinner & thinner just like the gloves companies. Whereas the construction company which has a handful of properties to sell, their stock turns into gold.
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