Posted on 22 May 2024
Myanmar’s demand for construction steel is rising slowly in line with active public and private construction activities. As steel production is limited in the country, curtailments on imports have affected steel consumption, Kallanish understands from a recent South East Asia Iron & Steel Institute conference in Vietnam.
Public infrastructure projects, including roads and bridges, are ongoing. The Ministry of Construction and the Ministry of Electric & Power are actively buying steel including rebar for such projects. Most stockists are active in supply tenders to these ministries. Import licences can be obtained from the Ministry of Commerce easily for such public projects.
The local private construction sector recovered in 2022 and 2023. Local large real estate developers are most active in Yangon private residential housing, particularly as urbanisation is strong. Foreign investment provides foreign currency through exports and capital inflows and local banks are also operating well, Kay Thi Lwin, chairman of Myanmar Iron And Steel Association said.
Despite this, Myanmar faces key challenges, he noted. These include import restrictions on steel, licensing, the depreciation of the Myanmar kyat against the dollar, electricity shortages and higher fuel costs, and domestic labour shortages resulting from emigration.
The country’s steel consumption is estimated at 1.2mt in 2023, of which around 650,000t was imported. “Steel consumption dropped after the political turmoil in 2021,” Kay noted. An ongoing import restriction saw imports plunge since 2021.The import policy for steel will continue, he said. The estimated import quota volume set aside for steel is 900,000t. The Myanmar government is supposed to approve $16bn of imports in the financial year 2024.
China, Malaysia, Thailand and Vietnam are the main steel exporters with China accounting for 50% of the overall import market. Malaysia supplies mostly long products and accounts for 20% of the market. Thailand and Vietnam both supply mostly flat products with 20% and 10% shares.
The drop in imports has been replaced by domestic rebar. Small induction furnaces in Myaung Takar in northern Yangon and industrial zones in Mandalay are producing around 550,000 t/y of rebar, angles and channels. Steel imports peaked at an estimated 2.2mt in 2020.
He identified three steel mills which are active in the country. Myingyan steel mill and Pin Pet steel mills are planning to resume production in 2024. There are also two active colour-coating operations in the country.
Source:Kallanish
