LSteel 9881 is the only company in Bursa which dealing with iron ore business.
The following will be extraction from 2018 report giving an impression the Group is optimism to their Iron Ore Business.
Extract from 2018 Financial Report....
Trading and Processing of Minerals Segment
The Group’s trading and processing of minerals segment focuses on export of steel-making related minerals, mainly in manganese ore.
The minerals segment recorded revenue of RM56.8 million in FY2018 compared to RM40.5 million in FY2017. The increase in revenue is mainly attributed to improved manganese ore market price. On average in FY2018, 10,000MT of minerals is exported monthly to the world’s largest steel producing country, China. The segment’s strategies are geared towards expanding the export market and cost control.
Iron ore price increased drastically following speculations of supply shortage resulted from Vale’s Brazilian mine accident and subsequent closure in January 2019. Several mining players including Rio Tinto, BHP, and Fortescue have expressed that they have no additional capacity to meet the gap left by Vale’s mine closure, thus we are bracing for the possibility of raw material shortage. We expect manganese ore deliveries in our minerals segment would continue its measured growth.
From November 2018 to March 2019, steel mills in mainland China had cut production to improve air quality, and are expected to resume production in April 2019. In the short term, there is a likely iron ore supply shortage resulted from Vale’s Brazilian mine closure. Barring any external shock such as global slowdown and given that demand for steel products continue to maintain stable growth, profit margin should improve. Our trading and processing of minerals segment is expected to continue its measured growth.
Today 18-5-19, the iron ore price surge to USD100 a ton, this is compatible the group forecast. The rising price will further stimulus the revenue of FY2019 to RM67.2 Million ie. increase of 20%. The profit of trading iron ore will rise in tandem with increase in revenue and expecting contribute with 6.7 million ie 10% of revenue.
Extract from Forces news dated 17-5-19