Posted on 23 May 2023
The six main ASEAN countries will continue to grapple with the prospect of massive oversupply as announced projects will overwhelm steel demand growth, Kallanish learns.
The new crude steel capacities from integrated mill projects announced to come onstream by 2026 total 76.9 million tonnes/year, with electric arc furnace capacities totalling 2.2m t/y. This exceeds the region’s capacity of 71.8m t/y as of 2021.
Overall steel demand in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam is forecast to rise by 3.4% on-year to 77.6mt this year, South East Asia Iron & Steel Institute (SEAISI) secretary general Yeoh Wee Jin told delegates at Monday’s SEAISI conference in Manila. This increase is subject to the worldwide risk of higher inflation, fluctuating steel prices and slowing steel demand in China and the region (see table below).
Regional mills under SEAISI are starting to mull over the decarbonisation journey of the industry in tandem with global efforts to counter climate change. These include setting up a roadmap with standards and goals, seeking financial support, and investment into technology and research & development. The most immediate impact would be that regional mills would need to prepare for carbon pricing, which will be in the form of a carbon tax, emissions trading system and CBAM, Yeoh observed.
However, in the meantime, the expansions and new projects being implemented at blast furnace/BOF mega-mills will deviate from this cause. As much as 53% of crude steel capacity in the region, amounting to 69mt, could be derived from blast furnaces/BOF in 2026 compared to 37% or 28mt as of 2022, Yeoh concluded.
ASEAN-6 2023 steel demand forecast | ||
Source: SEAISI | million tonnes | forecast growth vs 2022 |
Indonesia | 17.4 | +5.0% |
Malaysia | 7.8 | +4.1% |
Philippines | 10.8 | +6.0% |
Singapore | 2.5 | 0% |
Thailand | 16.7 | +3.7% |
Vietnam | 22.4 | +0.8% |
Source:Kallanish
