Update of First Half 2020 Steel Demand and Supply in ASEAN-6

Posted on 06 January 2021

Apparent steel demand in ASEAN-6 (Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam) registered a double-digit decline at 15.7% y-o-y in the first half of 2020. However, production showed only a single digit decline of 4% y-o-y, to 20.7 million tonnes in the same period. This could be the impact of covid-19 pandemic and partly to export in some countries. Export saw a significant increase of 1.3 million tonnes to 9.3 million tonnes in the first half of 2020. In the meantime, import dropped 13.6% y-o-y to 21.7 million tonnes in the same period.

Flat steel demand saw a double-digit decrease of 15% y-o-y to 17.3 million tonnes, a decline of more than 3 million tonnes region wide. Long steel demand contacted by 1.5 million tonnes to 17.3 million tonnes in the same period.

Flat steel production dropped nearly a million tonnes to 5.5 million tonnes in the first half of 2020. Import dipped by 2.5 million tonnes to 16.5 million tonnes. Export reduced 6% y-o-y to 4.6 million tonnes.

Long steel demand declined 16.5% y-o-y to 15.7 million tonnes. Domestic production remained unchanged at 15.2 million tonnes in the first half of 2020. Import dropped 1 million tonnes to 5.2 million tonnes in the first half of 2020. Export at 4.7 million tonnes was an increase of more than 2 million tonnes in the same period of 2020.

 

Indonesia

Total apparent steel demand in Indonesia registered a double-digit decline at 18.5% y-o-y to 5.8 million tonnes in the first half of 2020. Both flat and long steel demand dropped with double digit growth rates at 20% y-o-y and 16.4% y-o-y, respectively. Flat steel production declined around 300,000 tonnes to 2.5 million tonnes. Import dropped from 2.8 million tonnes to 2.2 million tonnes during the same period. Export slipped slightly to 1.4 million tonnes.

Long steel production dropped by 200,000 tonnes to 1.9 million tonnes from January to June 2020. Import reduced significantly, by 28.4% y-o-y to 684,247 tonnes in the same period. Export registered a positive growth rate of 2.9% y-o-y to 123,095 tonnes. This was a result of the significant increase in wire rod export from 21,929 tonnes in the first half of 2019 to 70,396 tonnes in the same period of 2020. Nearly half of which was the export to China, followed by export to Bangladesh and Philippines.

 

Malaysia

Malaysia’s apparent steel demand dropped dramatically, at 43% y-o-y to 2.7 million tonnes in the first half of 2020. Production, on the other hand, rose sharply by 1 million tonnes to 3.4 million tonnes in the same period. The bulk of production is expected to serve export market, which rose by 2.4 million tonnes. Import, on the other hand, continued to decline from 3.3 million tonnes in the first half of 2019, to 2.9 million tonnes in the second half of 2019 and to 2.7 million tonnes in the same period of 2020.

Flat steel demand contacted 20% y-o-y to 1.7 million tonnes. There was no hot rolled coil production while hot rolled plate production was as low as around 55,000 tonnes. Import continued to decline since 2018. The volume in first half of 2020 dropped 18.8% y-o-y to 1.95 million tonnes. Export slipped 23.3% y-o-y to 329,889 tonnes.

Long steel demand in Malaysia dropped sharply, by a 1.6 million tonnes, to 1.07 million tonnes from January to June 2020. Import declined significantly, from 927,063 tonnes to 745,966 tonnes. Production at 3.3 million tonnes in the first half of 2020, was an increase from 2.3 million tonnes in the same period of 2019.

Long steel export continued to increase significantly since first half of 2019 from an average of 100,000 -150,000 tonnes in each semester to 467,763 tonnes in the first half of 2019, and to 1.4 million tonnes in the second half of 2019. The export jumped to nearly 3 million tonnes in the first half of 2020. 60% of which was the export of wire rod, which surged by more than 6 folds to 1.8 million tonnes, followed by the export of bar, at nearly a million tonnes in the same period of 2020.

Out of a 3-million tonne wire rod export, 25% of which was to China, followed by the export to Philippines, Thailand, Myanmar and Indonesia. As for bar export, 80% of which was the export to China, followed by a 124,334 tonnes to Myanmar.

 

Philippines

Philippines’ apparent steel demand dipped by 900,000 tonnes to 4.1 million tonnes in the first six months of 2020. Production slipped 21% y-o-y to 1.8 million tonnes. Import registered a double-digit decline at 15% y-o-y to 2.3 million tonnes in the same period. There is no export of finished steel from Philippines.

Both flat and long steel demand registered a double digit decrease of 21% y-o-y and 16% y-o-y, respectively. Long steel production dropped nearly half a million tonnes to 1.78 million tonnes from January to June 2020. Import declined slightly to remain at a million tonnes in half year.

 

Singapore

Singapore’s apparent steel demand declined slightly, at 2.5% y-o-y to 1.15 million tonnes in the first half of 2020. This was mainly the result from a double-digit decrease in flat steel demand to 355,016 tonnes. Import rose slightly by 4% y-o-y to 969,790 tonnes. Export jumped 40% y-o-y to 614,774 tonnes, which should be the re-export of hot rolled coil to Batam, Indonesia.

Long steel demand, on the other hand, saw a double-digit increase of 15% y-o-y to 799,689 tonnes in the first half of 2020. Production dropped significantly, by 32% y-o- y to 180,683 tonnes. Import rose 8% y-o-y to 914,776 tonnes while export dropped more than 100,000 tonnes to 295,770 tonnes in the same period.

 

Thailand

Apparent steel demand in Thailand dropped 13.7% y-o-y to 8 million tonnes (a decline of 1.2 million tonnes). Both flat and long steel demand registered double digit decrease rates of 14.3% y-o-y and 12.6% y-o-y respectively.

Flat steel production dipped slightly, by 5% y-o-y to 1.3 million tonnes in the first six months of 2020. Import contacted by nearly a million tonnes to below 4 million tonnes. This was mainly the robust drop in hot rolled and cold rolled flat steel import. Meanwhile, import of coated sheet registered a double digit increase of 11.3% y-o-y to 1.8 million tonnes, especially the robust increase of hot dipped galvanized of around 200,000 tonnes in the first six months of 2020, compared to the same period of 2019. This may be a substitute of hot rolled coil import, which was controlled by trade remedies.

Thailand is not a major exporter for flat steel and the export volume dipped to 216,827 tonnes in the same period.

Long steel production contacted by 400,000 tonnes to 2.1 million tonnes from January to June 2020. Import dropped 15% y-o-y to 1.08 million tonnes. Export dipped by nearly half to 243,849 tonnes. This was mainly a result of the sharp drop in section and bar export. Major market of section export was Malaysia and the volume dropped from 76,121 tonnes in the first half of 2019 to 21,511 tonnes in the same period of 2020. Meanwhile, export to other main destinations, which are in ASEAN countries, showed a moderate decline.

 

Vietnam

Apart from Singapore, Vietnam is one of the ASEAN-6 countries that experienced a single digit decreasing rate of steel demand, at 5% y-o-y. The total demand dropped around 600,000 tonnes to 11.2 million tonnes. Flat steel demand declined 7.8% y-o-y to 5.6 million tonnes. Production dropped by 400,000 tonnes to 1.6 million tonnes. Import dipped slightly, by 4.4% y-o-y to 6 million tonnes. Export registered a decrease of 10% y-o-y to 2 million tonnes. Half of flat steel export was the volume of coated sheet, and the volume continued to increase, at 9.8% y-o-y in the first half of 2020.

Long steel demand dipped slightly, by 1.9% y-o-y to 5.6 million tonnes. Production at 5.9 million tonnes in the first half of 2020 was an increase of around 150,000 tonnes. Such volume was mainly the increase in wire rod production and it is believed that the boost up in production was to substitute import.

Import of wire rod dropped by a 170,000 tonnes in the same period. Import of section and bar also declined at around 10-14% y-o-y. All in all, long steel in Vietnam dipped significantly, by 32% y-o-y to 745,760 tonnes. Export remained a significant volume of a million tonnes, although a moderate decline of 7% y-o-y. Most of the export was to Cambodia, Thailand, South Korea and Malaysia.

Source : SEAISI