Posted on 30 Jun 2022
The ASEAN steel making facilities mainly use EAF technologies. However, recent developments and new investment in the region has led to much more integrated steel facilities (iron and steel making), in the form of blast furnaces and basic oxygen furnaces (BF/BOF).
The total BF/BOF capacity in the region doubled in volume from 15 million tonnes in 2018 to nearly 30 million tonnes in 2020 while EAF capacity increased gradually to above 70 million tonnes in the same year. Therefore, demand for iron ore has increased significantly in recent years, while scrap demand remained largely flat.
With the new investment, it is forecasted that there will be new BF/BOF capacities of another 90 million tonnes, should all planned projects come onstream. As such, demand for iron ore in ASEAN is expected to rise significantly in ASEAN in the future.
ASEAN steel industry still has to rely nearly fully on imports of iron ore and scrap. Malaysia, Vietnam and Indonesia are major iron ore importers in the region. Vietnam’s import continued to increase from 1.9 million tonnes in 2016 to above 50 million tonnes in 2021. Most of the import into ASEAN came from Brazil (46%), Australia (34%) and Malaysia (10%).
Malaysia’s iron ore import remained significant in the last 5 years at above 20 million tonnes per year. However, Malaysia is also a major exporter of iron ore. That means Malaysia is a transshipment point for iron ore redistribution into the ASEAN region.
Apart from Malaysia, the other major iron ore exporters in the region includes Indonesia and Myanmar. Major export markets for ASEAN iron ore were China (71%), Vietnam (23%) and Indonesia (13%).
Given that most ASEAN steel making facilities are EAFs, scrap is a very important raw materials in this region. Scrap demand in the region reached a high of 39 million tonnes in 2021. Indonesia and Vietnam have the largest scrap demand in the region. Indonesia’s scrap demand rose significantly from 9.3 million tonnes in 2019 to 14.2 million tonnes in 2020 and 16.3 million tonnes in 2021.
Vietnam’s scrap demand remained flat at about 10-11 million tonnes a year over the last few years, in contrast to the rapid rise in iron ore demand during the same period. Thailand’s scrap demand was down from 6-7 million tonnes per year to 4-5 million tonnes per year in 2019 and 2020 during the pandemic. Scrap demand bounced back to the pre-pandemic level at 6 million tonnes in 2021. Meanwhile, scrap demand in Malaysia and Philippines were as low as 3.5 million tonnes and 1.5 million tonnes in 2021, respectively.
Many countries in the ASEAN-6 still have to rely on imported scrap, except Philippines and Singapore. Vietnam is the largest scrap importing country in the region, at 5.4 million tonnes in 2021. Indonesia’s import declined from 2.6 million tonnes in 2019 to 1.4-1.5 million tonnes in 2020 and 2021. The slowdown could be highly affected by the pandemic. Indonesia’s government has launched new scrap import policies to ease import restrictions and to control metal impurity at 2% in order to ease the import as well as to avoid hazardous waste. Malaysia and Thailand’s import were around 1-2 million tonnes a year.
Philippines and Singapore are the only two countries that are major exporters for scrap, with an export of nearly a million tonnes a year.
Source:SEAISI
