To answer this question, I will tell you the steel making process for producing steel from iron ore and scrap. In the process, a lot of impurities such as nitrogen, silicon, phosphorus, sulphur and excess carbon are removed from the raw iron which are thrown out to the open shy.
By adding alloying elements such as manganese, nickel, chromium and vanadium to produce different grades of steel.
China has been importing raw iron ore from Australia and coal from Indonesia to produce more than 50% of the total production of steel for the whole world. China has been exporting steel for a long time.
Under the clean sky policy, China has stopped importing iron ore and coal producing to produce steel. Instead, China imports hot iron briquetted iron (HBI). HBI is selling like hot cakes. Besides China, India is also importing a lot of HBI.
Lion Industries is one of the largest producers of HBI if not the largest in South East Asia.
The price of HBI has increased due to the increased price of scrapped iron.
Lion Industries has been showing increasing profit in the last 7 quarters.
In the past 2015 and 2016, the profit for all steel manufacturers was badly affected due to China’s dumping of steel.
Masteel reported that the Malaysian Government imposed anti-dumping tax for rebar 13.42% for the year ending April 13, 2018, followed by 12.27% and 11.1 % in the next two years respectively as well as additional 5% import duty to protect our local steel industry.
That is why Lion Industries is reporting increasing profit which is the most powerful catalyst to move share price.
Although my intension for posting this article is to encourage you to buy to make money, I am obliged to tell you that my wife and I have a total of about 30 million shares. If you decide to buy, I am not responsible for your profit or losses.