Update of steel situation in ASEAN-6 in the first half of 2017

Posted on 07 December 2017
 

Source: SEAISI
 
Apparent steel consumption in the first half of 2017 in ASEAN 6 countries, namely, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam registered a moderate decline of 6% y-o-y. This was mainly due to a significant decrease in steel demand in Thailand and Vietnam and a moderate decline in Malaysia.
 
Indonesia’s apparent steel demand increased slightly, by 4% y-o-y to 6.8 million tonnes in the first half of 2017. Production of hot rolled steel products increased significantly, by 12% y-o-y to nearly 4 million tonnes, compared to an average growth rate of only 4% per year from 2011 to 2016. Import, on the other hand, declined marginally, by 1.7% y-o-y to 3.3 million tonnes. Export increased 32% y-o-y to 485,646 tonnes in the same period of 2017. 
 
The increase in steel demand in Indonesia was due to the expansion in flat steel consumption, at 6.8% y-o-y to 4.4 million tonnes. On the other hand, long steel demand declined slightly, by 1.3% y-o-y to 2.4 million tonnes. The increase in steel demand was a result of the expansion in manufacturing sector. 
 
Malaysia’s steel demand declined 7.7% y-o-y to 4.5 million tonnes in the first half of 2017. Production dropped 4% y-o-y to 1.8 million tonnes and import slowed down slightly, by 1% y-o-y to 3.5 million tonnes in the same period. Export, at 790,860 tonnes in the first half of 2017, was an increase of 51% y-o-y. 
 
The drop in steel consumption in Malaysia in the first half of 2017 was mainly due to a significant drop in long steel demand, at 12% y-o-y to 2.5 million tonnes. Long steel output remained unchanged at 1.7 million tonnes while import dropped from 1.4 million tonnes in the first half of 2016 to less than a million tonnes in the same period of 2017. 
 
Flat steel demand in Malaysia registered a marginal decline of 1% y-o-y. Domestic production started to slow down significantly since 2016 and continued to decline in the first half of 2017 to around 100,000 tonnes. Import, on the other hand, increased by a double digit of 16% y-o-y to serve the remaining demand. Export almost doubled in volume in the same period of 2017. 
 
Philippines’ steel demand continued to increase, at 9.8% y-o-y to 4.7 million tonnes in the first half of 2017. However, domestic production declined 7% y-o-y to 2 million tonnes. Import increased sharply, by 27% y-o-y to 2.7 million tonnes in the same period. There was no record of export. 
 
The significant increase in steel demand in Philippines in the first half of 2017 was a result of robust increase of flat steel demand, at more than 50% y-o-y in the same period, which was fully served by imports. Long steel demand, on the other hand, declined 5-6% y-o-y. This is the first time Philippines experienced a decline in long steel demand after experiencing continued increases since 2010. 
 
Singapore’s apparent steel consumption registered a double-digit growth rate of 14% y-o-y to 1.5 million tonnes in the first half of 2017. Domestic production picked up 9% y-o-y to 269,905 tonnes. Import dropped 9% y-o-y to 1.8 million tonnes and export retreated significantly, by 36% y-o-y to 626,343 tonnes in the same period of 2017. 
 
The significant growth in steel demand in Singapore was due to a huge increase in long steel consumption, at 49% y-o-y to above a million tonnes. Meanwhile, demand of flat steel dropped by 35% y-o-y. 
 
Thailand’s apparent steel demand registered a significant decline of 16% y-o-y to 8.4 million tonnes in the first half of 2017, a drop from 9.9 million tonnes in the same period of 2016. This was mainly due to the destocking activities following a strong build up of stock in 2016 on speculation of hiking steel prices. Domestic production dropped 18% y-o-y to 3.5 million tonnes. 
 
Thailand’s flat steel and long steel both registered negative growth rates in the first half of 2017. Long steel demand dropped by a double digit of 32% y-o-y while flat steel demand dropped moderately, by 4% y-o-y. 
 
Vietnam’s steel demand for the first time registered a negative growth rate of 11% y-o-y, after significant increases in steel demand in the last five years. Domestic steel production, however, still registered a strong growth rate of 11% y-o-y to 4.7 million tonnes in the first six months of 2017. Import declined 13% y-o-y to 7.7 million tonnes. Export, on the other hand increased by half a million tonnes to 2.2 million tonnes in the same period of 2017. 
 

Vietnam’s flat and long steel both registered declines in demand. Flat steel demand dropped 18% y-o-y and long steel demand retreated slightly, by 2-3% y-o-y in the first half of 2017. This could be attributable to the slowdown in construction of factories and warehouses due to the increase in construction material prices. Nevertheless, according to VSA, it is confident that the steel demand will recover in the second half of 2017 and that total steel demand in 2017 will still register a positive growth rate of around 5% y-o-y.  



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