Posted on 16 Dec 2020
While the region is still recovering from the covid-19 pandemic, most of the steel producers have started to strategise their approach to production and trade for a sustainable business. Global trade is well expected to fall in 2020 as economic activities around the world are disrupted. As for the ASEAN region, steel producers are charting for a more resilient supply chain and seeking every new trade market opportunity within the region. Beside the existing larger markets within ASEAN countries, access to a smaller but more emerging economy could play an important role in rejuvenating the local producers. Myanmar and Cambodia might be seen as a smaller part of ASEAN but with a GDP growth of about 6-7% each for 2 consecutive years 2018 and 2019, this is very impressive.
Myanmar
In 2019 Myanmar steel demand was 2.3 million MT of finished steel products of which domestic production contributed only 0.2 million MT (8.3%) and the rest 2.1 million MT (91.7%) of finished steel products were imported. It is estimated that in 2020, Myanmar steel demand will rise to 3 million MT. Table 1 shows the imports breakdown of Myanmar in 2019. 75.4% of imports came from China and only 14% of the import came from ASEAN 6. Most of the imported products are Bars, Sections and Wire Rods. This tells us that Myanmar is relying very much on imports of long products for its expanding infrastructure and construction industry and China is supplying these materials to the country. Now, this is a potential export market within the region that ASEAN steel producers should venture and capitalize easily and quickly in the next few period of months.
Cambodia
The economy of Cambodia is depending basically on tourism, manufacturing (garments and textiles) exports, and construction (total 70% of the country economy). Cambodia is a small country and is relying on the support of other economies for growth during its transition from a very low to a higher income society. It has a big infrastructure gap between the rural and urban. In 2019, Cambodia imported 1.7million MT of finished steel products for its development of infrastructure. Table 2 shows that Cambodia basically imported Bars, Sections and Wire Rods (88% of total import) from Vietnam (70%) and China (19%). Now that Cambodia has managed to control well the pandemic, it is bouncing back by pushing the economy through local consumption, the country is seeking more steel products as a basic material for its growth.
Returning to the economic growth may take longer time and uneven in the process, but there are always new opportunities and new potentials for a better export market during the recovery. ASEAN steel producers should quickly look into these 2 emerging markets for the reasons of their high rising steel demand in their much needed steel supply for basic infrastructure development and construction industry.
Table 1: 2019 Myanmar Imports (Total Imports = 2.1 million MT)
| Sum of Quantity_Tonnes | Ctry Origin | |||||||||||
| Products | China | India | Indonesia | Japan | Malaysia | Others | Singapore | South Korea | Taiwan | Thailand | Vietnam | Grand Total |
| 300 Crude Steel Products | 0.2% | 0.1% | 0.3% | |||||||||
| 400 Hot-Rolled Steel Products | 37.2% | 1.9% | 0.5% | 3.5% | 7.8% | 1.6% | 0.1% | 1.8% | 0.3% | 1.9% | 0.3% | 56.8% |
| 410 Rails & Accessories | 0.1% | 1.6% | 1.8% | |||||||||
| 420 Steel Sheet Piles | 0.2% | 0.2% | 0.5% | |||||||||
| 430 Sections | 11.1% | 0.1% | 1.2% | 0.7% | 0.3% | 0.1% | 13.5% | |||||
| 440 Bars | 14.0% | 1.9% | 0.5% | 4.0% | 0.4% | 0.3% | 1.4% | 0.1% | 22.5% | |||
| 450 Wire Rods | 5.5% | 0.1% | 2.6% | 1.1% | 0.1% | 0.2% | 9.6% | |||||
| 470 Plates (>=3 mm.) | 5.4% | 0.3% | 0.3% | 0.3% | 6.4% | |||||||
| 480 HR Coils/Sheets(< 3 mm.) | 0.8% | 1.1% | 0.3% | 0.3% | 0.1% | 2.7% | ||||||
| 500 Cold-Rolled Products | 0.8% | 0.1% | 1.0% | |||||||||
| 600 Coated Sheets&Strips | 21.4% | 0.1% | 0.1% | 0.6% | 0.4% | 1.2% | 23.9% | |||||
| 700 Pipes&Tubes | 13.4% | 0.1% | 0.2% | 0.9% | 14.7% | |||||||
| 800 ColdFinished&ColdFormed | 2.5% | 0.1% | 0.5% | 3.2% | ||||||||
| 900 Iron & Steel Scrap | ||||||||||||
| Grand Total | 75.4% | 2.1% | 0.5% | 3.6% | 8.3% | 1.6% | 0.4% | 2.5% | 0.7% | 4.6% | 0.3% | 100.0% |
Table 2: 2019 Cambodia Imports (Total Imports = 1.7 million MT)
| Sum of Quantity_Tonnes | Ctry Origin | ||||||
| Products | China | Malaysia | Singapore | Taiwan | Thailand | Vietnam | Grand Total |
| 300 Crude Steel Products | 0.0% | 0.2% | 0.2% | ||||
| 400 Hot-Rolled Steel Products | 10.4% | 4.2% | 0.1% | 0.0% | 4.7% | 69.6% | 89.0% |
| 410 Rails & Accessories | 0.1% | 0.1% | |||||
| 420 Steel Sheet Piles | 0.2% | 0.1% | 0.3% | ||||
| 430 Sections | 1.0% | 0.2% | 6.3% | 7.5% | |||
| 440 Bars | 6.6% | 4.0% | 4.4% | 37.1% | 52.1% | ||
| 450 Wire Rods | 1.8% | 0.2% | 0.1% | 26.1% | 28.3% | ||
| 470 Plates (>=3 mm.) | 0.5% | 0.1% | 0.6% | ||||
| 480 HR Coils/Sheets(< 3 mm.) | 0.1% | 0.1% | |||||
| 470 Plates (>=3 mm.) | 0.2% | 0.3% | |||||
| 480 HR Coils/Sheets(< 3 mm.) | 5.3% | 1.0% | 0.1% | 6.4% | |||
| 700 Pipes&Tubes | 2.7% | 0.3% | 3.0% | ||||
| 800 ColdFinished&ColdFormed | 0.8% | 0.4% | 1.2% | ||||
| 900 Iron & Steel Scrap | |||||||
| Grand Total | 19.3% | 4.2% | 0.1% | 1.0% | 5.7% | 69.6% | 100.0% |
Source:SEAISI
