Building Materials Cost Rises Up To 22% Across Malaysia:
The building materials cost index (BCI) (without steel bars & with steel bars) for all building categories in Peninsular Malaysia, Sabah and Sarawak increased between 0.2 to 22.0 per cent in August 2022 as compared to a year ago.
For the same period, the increase in BCI for Peninsular Malaysia was between 5.5 and 18.0 per cent, Sabah between 0.2 and 15.3 per cent and Sarawak between 5.4 and 22.0 per cent.
In a release by the Department of Statistics Malaysia (DOSM) today entitled ‘Special Release 2 (For Building and Structural Works) August 2022,’ figures show an annual comparison for the period of August 2022 as compared to a year ago showed an increase in BCI with steel bars for all areas in Peninsular Malaysia, Sabah and Sarawak.
The chart above shows the prices of Malaysia's scrap iron, steel billet, and steel bar. The price chart can be used to gauge the profitability of steel manufacturing companies. When the spread between scrap iron and steel products expands, the profit of the steel mill will increase, and vice versa.
Construction activity increase
Construction activity in Malaysia rose 6.1 percent year-on-year in the June quarter of 2022, rebounding from a 6.1 percent drop in the prior period and indicating the first increase in a year, as the economy fully emerged from coronavirus curbs. There was an upturn in activity related to residential buildings (7.9 percent vs -11.9 percent in Q1), while the output of non-residential buildings picked up strongly (18.1 percent vs 4.2 percent), and special trade activities continued their double-digit growth (11.9 percent vs 24.1 percent). In contrast, civil engineering activity fell at a slower rate (-4.4 percent vs -15.5 percent). source: Department of Statistics, Malaysia
Due to Building materials & Construction activity increase AYS Venture should report better profit
AYS Ventures Bhd is an investment holding principally involved in the trading and manufacturing of steel related products. The company is organized into three segments namely trading, manufacturing and others. The trading division trades and markets a diverse range of steel products and construction materials whilst the manufacturing division manufactures and trades pressed steel and fiberglass reinforced polyester sectional water tanks, steel purlin, and wire products. Other segment includes investment holding, warehousing and storage services and dormant. The products serve customers in the construction, engineering for heavy steel industries, fabrication, oil and gas, power plant and shipbuilding sectors. The group principally operates within Malaysia.
