This article first appeared in The Edge Financial Daily, on September 15, 2016.

KUALA LUMPUR: Steel counters Melewar Industrial Group Bhd (MIG), Hiap Teck Venture Bhd, Southern Steel Bhd and Leader Steel Holdings Bhd were among the top gainers on Bursa Malaysia yesterday, following reports on the closure of Megasteel Sdn Bhd’s Banting plant.

Megasteel, a 79%-owned subsidiary of Lion Corp Bhd and the country’s sole producer of hot-rolled coils (HRC) which also produces cold-rolled coils (CRC) and other steel-related products was reported by a local newspaper to have closed its plant in Banting, Selangor.

In a bourse filing yesterday, Lion Corp clarified that the published article had quoted industry sources, while the group had announced earlier that Megasteel had temporarily ceased operations.

“Megasteel had been suffering losses in the past years due to excessive dumping of steel products by foreign millers and had been operating intermittently depending on market conditions.

“The announcement in January by the ministry of international trade and industry that the government had terminated the investigation for the Safeguard Petition on imported HRC had further impacted Megasteel’s operations which resulted in the retrenchment of its staff.

“The company had in its interim financial reports for the quarters ended March 31, 2016 and June 30, 2016 reported that Megasteel had temporarily ceased operation following the aforesaid government decision,” the filing read.

Following the announcement, Lion Corp closed half a sen or 25% lower at 1.5 sen. Lion Diversified also slipped half a sen or 16.67% to close at 2.5 sen.

An analyst with a local research firm said reports of Megasteel’s closure will have a positive impact on CRC players such as MIG’s 71.51%-owned subsidiary Mycron Steel Bhd, and CSC Steel Holdings Bhd.

“The temporary cessation of Megasteel’s operations would benefit CRC players as it opens up the opportunity for them to source HRC, which is a raw material for CRC, from alternative providers,” he told The Edge Financial Daily.

CSC Steel shares ended the day up two sen or 1.13% at RM1.79, while Hiap Teck shares gained half a sen or 1.72% to 29.5 sen. Southern Steel’s counter was up six sen (5.66%) to RM1.12, while Leader Steel jumped nine sen (21.43%) to 51 sen.

Meanwhile, MIG shares were up three sen (5.56%) to 57 sen, while Mycron Steel shares were down 2.5 sen (2.76%) to 88 sen.

MIG, which had been queried by Bursa after its share price appreciated 42.5% since its last Friday’s close of 40 sen, said it was unaware of any reasons that could account for the sudden spike in its share price.

Mycron Steel has also witnessed a sharp increase in market price and volume recently. Its share price has appreciated 95.5% since Sept 1’s closing price of 45 sen.