ASEAN-6: The Major Market for Steel Import or the Growing Steel Exporter

Posted on 27 October 2020

Introduction
ASEAN has been importing the bulk of finished steel, registering around 50 million tonnes a year while export was as low as 7-8 million tonnes a year. However, in recent years, the region’s finished steel export surged double in volume to 15 million tonnes in 2019. 

Generally, most of the export from the region were bar and wire rod and the major market for the products are ASEAN-4 (mainly Brunei, Cambodia, Laos and Myanmar). Amidst the shortage of semi-finished products, export of the products from the region appeared to increase significantly in 2019 and 2020. Apart from ASEAN-4 countries, China has become a major market for both semi-finished steel and long steel for ASEAN-6. 

Vietnam
Vietnam’s market for steel is 24 million tonnes in 2019. The country’s long steel demand is covered by local producers. Long steel import registered around 2 million tonnes a year and exports were as low as 300,000 -400,000 tonnes a year. 

Vietnam is the largest steel exporter among the 6 countries. Vietnam’s steel export volume gradually increased to 1 million tonnes in 2017 and 2 million tonnes in 2019. Nearly half of the export is wire rod, followed by bar and sections. Vietnam exported wire rod and bars to various countries, mainly within ASEAN-10 countries. Cambodia seems to be the largest market for Vietnam’s long steel export, at 400,000 tonnes for wire rod and 600,000 tonnes for bars in 2019, followed by the export to Thailand and Afghanistan. Export volume to Cambodia continued to increase significant to 286,000 tonnes in the first seven months of 2020 for wire rod and 377,000 tonnes for bar during the same period. 

As for flat steel export in Vietnam, half of the volume of the export is coated sheet, around 2 million tonnes in 2019, followed by welded pipes (852,000 tonnes), cold rolled coil (843,000 tonnes) and hot rolled coil (767, 000 tonnes). The main market for these product are within ASEAN-6 countries. USA, Canada and Pakistan are also the major destinations for Vietnam’s flat steel.  Within the ASEAN-6 destinations, Indonesia, Malaysia and Thailand are the main market for Vietnam’s flat steel. Export volume for flat steel declined slightly in the first seven months of 2020. 

Indonesia
Indonesia’s steel market is 16 million tonnes in 2019. Indonesia steel demand for both long and flat are largely covered by local producers. However, import of flat steel are still significant, at around 5-6 million tonnes a year. 

Indonesia is the second largest exporters among the group. As for export, Indonesia’s export of long steel is as low as 200,000-300,000 tonnes a year. However, export of bar increased significantly in 2020, more than half of the export was to Myanmar. Export of seamless pipes appeared to be significant. Major markets are Kuwait UAE and Singapore, which are the main markets for oil & gas industry. The big market for wire rod export in Indonesia is Bangladesh and Australia. 
Export of flat steel continued to increase from the low base of 600,000 tonnes to 2 million tonnes in 2018 and 3 million tonnes in 2019. A bulk of the export is hot rolled coil (1.8 million tonnes in 2019), followed by hot rolled plate (778,000 tonnes) and cold rolled coil (390,000 tonnes). 

80-90% of hot rolled coil and cold roiled coil export are stainless steel products. Taiwan, Malaysia and China are target market for the product. The export of stainless steel emerged in Indonesia in recent years after the start-up of Tsingshan Steel in Sulawesi Indonesia.

Export of stainless HRC in Indonesia declined from 914,000 tonnes in the first seven months of 2019 to 717,000 tonnes in the same period of 2020. Major market destinations are Taiwan, Vietnam, south Korea and Malaysia. 

Indonesia’s export of stainless cold rolled coil increased 9% y-o-y to 275,000 tonnes in the first seven months of 2020. China remained the largest market (nearly half of the total volume), followed by south Korea and Italy.  

Malaysia
Total steel market in Malaysia registered 9.2 million tonnes in 2019. Similar to other countries in ASEAN-6, long steel demand is largely covered by local producers. However, import of long steel still registered a significant volume of around 2-3 million tonnes a year. 

Malaysia was not a major exporter for both long and flat steel until in 2019. Malaysia’s long steel export registered a low base at 300,000-400,000 tonnes a year. However, the volume jumped to 1.9 million tonnes in 2019, 70% of which is the export of wire rod. 

Major market of wire rod export in Malaysia are China and ASEAN-6 countries, in a total of 1.3 million tonnes in 2019 and nearly 2 million tonnes in first seven months of 2020. Wire rod export from Malaysia to China was half of the total export volume, followed by export to Philippines and other ASEAN-6 countries.
Bar export registered 324,000 tonnes in 2019 and the volume jumped to a million tonnes in the first seven months of 2020. Export to China was more than 80% of total bar export, followed by the export to Myanmar.  

Conclusion
All in all, Vietnam, Indonesia and Malaysia are emerging exporters for finished steel. Vietnam and Indonesia focus more on export of flat steel while Malaysia is emerging export of long steel, especially wire rod and bar. Major markets for flat steel export are the ASEAN-6 countries, China, Taiwan. Emerging markets for the flat export also include Pakistan, Myanmar and India. 

Cambodia and Myanmar are the largest market for bar and wire rod, especially the export from Vietnam and Malaysia. Apart from ASEAN-6 itself, Bangladesh and Kuwait appear to be major markets for long steel export from the region.

Source : SEAISI