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Focus Malaysia
04-07-2025
- Business
- Focus Malaysia
Tariff shock fizzles as China remains key driver of steel, aluminium prices
STEEL prices saw a brief uptick following the US tariff announcement, but the impact is limited as China, the world's largest steel consumer continues to dictate global pricing. Chinese exports to the US are small and largely consist of high-value processed goods that already command premium prices. The pattern mirrors 2018, when prices spiked briefly post-tariff but slumped soon after as exemptions were granted. Aluminium prices fluctuated between USD2,300/MT and USD2,500/MT over the past three months, despite expectations of sustained strength driven by unexpectedly strong consumption in China earlier in 2024. That said, the US 25% additional tariff on aluminium imports globally introduces short-term market uncertainty. The tariff will raise costs for US buyers and could prompt main exporters to the US, such as Canada and Mexico, to redirect shipments to other markets like the EU. However, the impact on China is likely minimal, as 80%-90% of its aluminium production is consumed domestically. In the medium-term, the market is expected to adjust through trade diversions or production cut to maintain demand-supply balance. 'As such, we maintain our view that China's demand rebound remains the key driver of aluminium prices going forward,' said Kenanga. We retain our average aluminium price assumptions at USD2,450/MT for 2025 and USD2,550/MT for 2026. China's steel demand is poised for modest growth in 2025 after years of stagnation, supported by a stabilising property market, government stimulus, and improving consumer sentiment. A potential RMB4.4t in local government bond issuance could supercharge infrastructure spending, while property stabilisation is now a national priority. Weak profitability has already triggered production cuts in China, pushing struggling steel producers toward consolidation. If capacity limits are enforced, higher utilisation rates could lift steel prices. With current prices hovering near historical lows, the setup is in place for a potential rebound. The silver lining is that more stable steel prices translate to steadier input costs for steel product players like ENGTEX and ULICORP (OP; TP: RM1.83), reducing earnings volatility. A new water tariff sub-category for data centres may take effect soon with rates estimated at RM5.50/m3 according to SPAN. The sentiment towards water-related stocks has significantly improved since last year backed by ongoing tariff adjustments and gradual progress in water infrastructure development. Malaysia's data centre boom is putting pressure on water supply, with reserve margins stuck at 15%—well below the 25% target. The tariff hike is expected to inject fresh capital into water operators, accelerating capex and placing ENGTEX in a strong position to benefit from a likely ramp-up in pipe replacement orders starting next year. Encouragingly, there have been several positive developments, including: (i) PBA (Not Rated) planning to complete three water pipeline projects worth RM189 mil over the next two years, (ii) PAAB building two new water treatment plants in Seberang Perai worth RM1 bil, and (iii) Sarawak's allocation of RM1.08 bil for water pipe upgrades. Several mega infrastructure projects are set to be rolled out in CY25, including: (i) Sungai Perak Raw Water Transfer Scheme to Penang (SPRWTS), (ii) Langat 2 water treatment plant, and (iii) Sungai Rasau phase 2. Based on our estimates, the total value of the water pipe components for these projects is approximately RM1.1 bil. —July 4, 2025 Main image: Outbuild
Yahoo
25-03-2025
- Business
- Yahoo
What Does United U-LI Corporation Berhad's (KLSE:ULICORP) Share Price Indicate?
While United U-LI Corporation Berhad (KLSE:ULICORP) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the KLSE over the last few months, increasing to RM1.74 at one point, and dropping to the lows of RM1.42. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether United U-LI Corporation Berhad's current trading price of RM1.54 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at United U-LI Corporation Berhad's outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Good news, investors! United U-LI Corporation Berhad is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, we've used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock's cash flows. we find that United U-LI Corporation Berhad's ratio of 9.59x is below its peer average of 18.75x, which indicates the stock is trading at a lower price compared to the Building industry. Although, there may be another chance to buy again in the future. This is because United U-LI Corporation Berhad's beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity. Check out our latest analysis for United U-LI Corporation Berhad Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. United U-LI Corporation Berhad's earnings over the next few years are expected to increase by 66%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value. Are you a shareholder? Since ULICORP is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. With an optimistic profit outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current price multiple. Are you a potential investor? If you've been keeping an eye on ULICORP for a while, now might be the time to enter the stock. Its buoyant future profit outlook isn't fully reflected in the current share price yet, which means it's not too late to buy ULICORP. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Every company has risks, and we've spotted 2 warning signs for United U-LI Corporation Berhad you should know about. If you are no longer interested in United U-LI Corporation Berhad, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
