ASEAN Apparent Steel Consumption: A Sharp Fall After the Global Economic Meltdown

Posted on 06 November 2009
 

Source: SEAISI

The ASEAN steel industry as a whole registered a significant decline in output since the second half of 2008 till the first half of 2009 due to a sharp drop in steel demand. A recovery in steel demand in the region started in the second half of 2009, and the momentum is expected to b carried into 2010.

 

Apparent steel consumption in ASEAN in the second half of 2008 declined by 6 million tonnes when compared to the first half of 2008 to 20 million tonnes. The deceleration in demand maintained its momentum throughout the first half of 2009, which registered 16.3 million tonnes. Production in the second half of 2008 dropped by 32% q-o-q to 10 million tonnes and picked up slightly in the first half of 2009. This is in line with the global capacity utilization of steel industry as reported by the World Steel Association. The global utilization ratio was slashed significantly in the second half of 2008 and the first half of 2009. However, a clear recovery was seen with a continuous increase of the monthly utilization rate from below 60% to 71.7% between January and August 2009.

 

Import of steel products in ASEAN continued to decline substantially from the second half of 2008 to the first half of 2009. Import registered 13.9 million tonnes in the second half of 2008, a drop of 16% from the first half of 2008, and continued to decline to 9.3 million tonnes in the first half of 2009. Export in the second half of 2008 dipped sharply from 5.3 million tonnes in the previous quarter to 4 million tonnes, and further decreased to 3.7 million tonnes in the first half of 2009.

 

Table of Apparent Steel Consumption in ASEAN

 

H1 2008

H2 2008

H1 2009

Production

14,777,362

10,020,730

10,580,475

Import

16,550,243

13,922,572

9,328,006

Export

5,341,711

3,977,163

3,656,112

Consumption

25,985,894

19,966,139

16,252,368

 

Indonesia’s apparent steel consumption in the first half of 2009 dropped by half when compared to the same period of 2008 to 2.7 million tonnes. Production declined by 34% y-o-y to 2.4 million tonnes. Import also recorded a significant slowdown by more than half to 1.2 million tonnes. Export dipped by 12% to 878,000 tonnes.

 

Malaysia’s steel demand continued to drop dramatically to 2.8 million tonnes in the first half of 2009, a decline of 41% y-o-y. Production picked up slightly when compared to the previous quarter, but declined by 26% y-o-y to 2.37 million tonnes in the first half of 2009. Import continued to decline since the second half of 2008 to reach 1.58 million tonnes in the first half of 2009. while Malaysia’s steel export shrank by 33% in the second half of 2008 when compared to the first half of 2008, the figure was seen to pick up robustly to 1.1 million tonnes in the first half of 2009, an increase of 63% from the previous quarter and 8.4% from the same period of 2008.

 

Philippines’ steel demand continued to decline from 2.1 million tonnes in the first half of 2008 to 1.3 million tonnes in the first half of 2009. Production declined substantially from 1 million tonnes in the first half of 2008 to 768,000 tonnes in the same period of 2009. Likewise, import at 534,000 tonnes in the first half of 2009 was half of the volume when compared to the same period of 2008. Export figures for the first half of 2009 are not available. However, it is expected that the volume, if any, would not be significant.

 

Singapore’s steel consumption in the first half of 2009 registered 1.07 million tonnes, a decline of 18% y-o-y. Production and import contracted by 18% y-o-y and 13%y-o-y, respectively. Export dropped by 8% to 783,000 tonnes.

 

Thailand’s steel consumption plummeted substantially from 7.5 million tonnes in the first half of 2008 to 6 million tonnes in the following quarter and dipped further to 3.9 million tonnes in the first half of 2009. Production fell by 35% q-o-q in the second half of 2008 and declined slightly by 2% q-o-q in the first half of 2009 to 2.9 million tonnes. However, import in the second half of 2008 remained significant at 3.8 million tonnes and contracted by half to 1.7 million tonnes in the first quarter of 2009. Export continued to fall to 699,000 tonnes in the first quarter of 2009.

 

In the case of Vietnam, the country’s steel consumption of 4.4 million tonnes in the first half of 2009 was an increase of 31% when compared to the second quarter of 2008, but a decline of 8% when compared to the same period of 2008. Production declined slightly from quarter to quarter to 1.8 million tonnes in the first half of 2009. On the other hand, import in the second half of 2008 dropped by 92% q-o-q and picked up again to 2.8 million tonnes in the first half of 2009. Vietnam was the largest exporter of finished steel in the first half of 2008 with a volume of 1.2 million tonnes, or 23% of the region’s total steel export. However, there was no record of export in the second half of 2008 while the volume in the first half of 2009 was 197,000 tonnes.



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