KUALA LUMPUR, July 13 — The current cost headwinds in the construction sector remain manageable with softening steel bar prices and a slower increase in cement prices, said MIDF Amanah Investment Bank Bhd.
Accordingly, the investment bank has maintained its 'Positive' rating in the sector.
“We expect the sector to benefit from improving job flows driven by Budget 2023 and also development plans in Sarawak to improve connectivity in the state, which is vital to serve as a gateway to Nusantara when Indonesia moves its capital to Kalimantan,” it said in a note today.
MIDF said the average prices of steel bars in Malaysia softened for the second consecutive month, in line with the decline in the international prices of steel and iron ore, as expected when China authorities stepped in to curb the surge in iron ore prices back in March 2023.
Based on the prices of five types of mild steel bars and four types of high-tensile deformed bars tracked by the Department of Statistics Malaysia (DOSM), the average price declined 0.53 per cent month-on-month (m-o-m) in June 2023 to RM3,706.95 per tonne, it said.
Meanwhile, on cement prices, the average price for the binding substance continued to rise for the eighth consecutive month by 0.22 per cent m-o-m, its slowest pace of monthly increase since December 2022, to RM22.87 per 50kg bag, on the back of higher selling prices and lower rebates offered due to higher raw materials cost.
The Northern region of the peninsula recorded the highest increase by 1.4 per cent m-o-m to RM22.57 for every 50kg bag, while the Central and Eastern regions saw a rise of 0.1 per cent m-o-m and 0.4 per cent m-o-m to RM22.03 and RM22.49, respectively.
Prices remained unchanged in Sabah and Sarawak, it added.
— Bernama
