THE recent steep fall in the stock prices of steel-related companies on Bursa Malaysia is likely to be a short-term correction, as the strength in commodities will be supported by the global economic recovery and acceleration in the re-opening phase in various countries, potentially by the first quarter of 2022, which will pave way for a return to normalcy in 2023.
This was opined by Hong Leong Investment Bank head of retail research Ng Jun Sheng, who tells StarBizWeek that given the resurgence in the Covid-19 cases currently, coupled with the slow vaccinations globally, there is ample room for further upside in the commodity’s price trajectory at least until first-quarter 2022 “but we do see bouts of profit taking ahead amidst recent unprecendented rally.”
He also notes that near-term seasonal demand weakness and recovering iron ore supply from Vale (the world’s largest producer of iron ore, pellets and nickel) in the second half could ease prices.
...