ASEAN’s long product demand has been increasing at a moderate but consistent rate. The average growth rate of long steel demand from 1998 to 2011 registered 6.6%. Production grew by 5.8% during the same period. The bulk of the domestic production is to serve the construction sector which is the largest steel consuming sector in the region. The region is largely self-sufficient in terms of meeting the demand for commercial grade steel for the construction sector. Import volume, at 9.4 million tonnes in 2011, was mainly for machinery grade such as merchant bar and high carbon wire rod.
China has become a major source of long products import in ASEAN. About 40% of the section import in ASEAN in 2011 was from China while bar and wire rod from China accounted for 23% and 42% of the regions total import in 2011 respectively.
Looking at China’s export volume to ASEAN countries, it is apparent that there has been a significant shift from export of carbon steel to alloy steel in recent years. China’s export volume of carbon section to ASEAN has dropped significantly from over 800,000 tonnes in 2007 to less than 200,000 tonnes in 2011 whereas the export of alloy section from China to ASEAN surged substantially from less than 30,000 tonnes in 2007 to approximate 500,000 tonnes in 2011.
Meanwhile, export of carbon bar from China dropped sharply from about 800,000 tonnes in 2007 to only 4,000 tonnes in 2011, while export of alloy bar jumped from 300,000 tonnes in 2007 to 600,000 tonnes in 2011.
Export of wire rod from China to ASEAN increased significantly and reached the peak of more than a million tonnes in 2007. However, the volume declined substantially to less than 10,000 tonnes from 2009 onwards, and registered only 1,000 tonnes in 2011. However, export of alloy wire rod rose significantly from 140,000 tonnes in 2006 to nearly 900,000 tonnes in 2007, and the volume has been maintained since then with about one million tonnes exported to the region in 2011.
China’s export volume of the three major long products, i.e., section, bar and wire rod, maintained thier momentum in the first three months of 2012. Export of carbon section reduced by half from January to March 2012, when compared to the same period of 2011 while export of alloy section doubled in volume in the same period. China’s export of carbon bar has fizzled out with a volume of less than 1,000 tonnes in the first three month of 2012 while the alloy grade bar rose sharply by 82% to 313,000 tonnes in the same period. China’s export of alloy wire rod, at 370,000 tonnes in the first three months of 2012, was a substantial increase from the 230,000 tonnes registered in the same period of 2011.