Posted on 15 Apr 2024
Overall ASEAN-6 steel demand in the first half of 2023 slowed down 2.5% y-o-y. This was because of the sharp decline in Vietnam’s steel demand. Meanwhile, Indonesia’s steel demand jumped by a double-digit growth rate, which helps regional steel demand to remain steady.
Indonesia’s steel demand registered 9 million tonnes, an increase of 38% y-o-y. Flat steel demand jumped by 2 million tonnes to 5.4 million tonnes. This was mainly due to a huge increase of hot rolled plate and hot rolled coil demand. This could be a result from the moving of capital city and that there is more investment for new ports and shipbuilding. Long steel demand also registered an increase of half a million tonnes to reflect the growing construction sector.
Malaysia’s total demand continued to increase moderately. Demand rose 7% in the first half of 2023. Long steel demand rose 19% y-o-y or an increase of 200k tonnes to 1.3 million tonnes as demand for construction activities is still on-going. Flat steel demand, on the other hand, slowed down 5% y-o-y to 1.8 million tonnes. Demand for hot rolled plate increased 34% while demand for hot rolled coil and cold rolled coil shrank. This could be a result from the increase of electricity tariff in the first half of the year and for that it affected energy-intensive industry production.
Philippines’ on-going construction activities has positive impact on steel demand, which increase 5% y-o-y in the first half of 2023. Long steel demand rose by 400k tonnes to 3.2 million tonnes while flat steel demand slowed down 7% to 1.6 million tonnes.
Singapore’s steel demand recovered significantly, at 14% y-o-y to 1.4 million tonnes. Long steel demand jumped 43% y-o-y to 1.2 million tonnes. This is owing largely to the backlog of construction projects, which continued when labour and material supply resumed after the pandemic. Flat steel demand, on other hand, dropped by half to 181k tonnes in the same period. Hot rolled plate import was entirely re-exported to Batam for ship building industry in Indonesia.
Thailand’s overall economic slowed down since before the pandemic. Construction activities remained quiet and manufacturing sectors have not picked up fast enough to boost up steel market. Steel continued to shrank 3% y-o-y to 8.3 million tonnes demand in the first half of 2023. Flat steel demand dropped 3 % to 5.2 million tonnes and long steel demand dropped 2.5% to 3.1 million tonnes in the same period.
Vietnam’s steel demand stagnated even before the pandemic and continued the same trend. Total steel demand dropped 28% y-o-y to 9.3 million tonnes in the first half of 2023. Flat steel demand contracted more than a million tonnes to 4.5 million tonnes and long streel shrank 1.5 million tonnes to 4.7 million tonnes in the same period. This was mainly due to the weakening construction sector, high interest rate, lower demand and moreover, the country is encountering electricity shortage which disrupted many manufacturing activities.
The ASEAN countries’ steel demand have faced a deceleration due to worsening global economic situation and the impact from the pandemic. However, construction projects in the region have put the region’s steel demand back on its normal growth track. It is expected that steel demand in the region will be boosted in the near future along with the launch of government’s infrastructure projects in many countries.
Source:SEAISI
