ASEAN’s total steel-making capacity is estimated at 39.4 million tonnes in 2013 and is expected to expand by 6-7 million tonnes by next year. Most of the expansion projects come from Vietnam. It is expected that the country may boost its steel-making capacity by more than 4 million tonnes in 2014.
Despite the increased capacity, annual utilization of steel-making facilities in the region remained low. Capacity utilization for semi-finished steel in the region registered a record high of 75.8% in 2007. However, capacity utilization reduced significantly after the financial crisis in 2008 to between 50-60%. The utilization rate in 2012 was 51%, the lowest since 2008.
Steel-making in the region is basically carried out via the EAF route by using ferrous scrap as the main raw material. However, domestic supply in the region is not sufficient with a significant import volume of around 8-9 million tonnes each year.
According to the World Steel Association, total world trade in ferrous scrap in 2012 was around 104 million tonnes. The major net importers of ferrous scrap were other Europe (countries outside of EU27) and South Korea. Net import volume of ferrous scrap in other Europe increased from 12 million tonnes in 2003 to 20 million tonnes in 2012. Meanwhile, net import volume in South Korea rose from 6 million tonnes in 2003 to 10 million tonnes in 2012.
ASEAN was the third largest ferrous scrap net importer in the world with total net import volume of 7 million tonnes in 2012. All of the ASEAN countries are net importers of ferrous scrap, except Philippines and Singapore.
The major sources of ferrous scrap import for ASEAN were USA, Australia and EU27. According to the data from the World Steel Association, USA’s export of ferrous scrap had been increasing consistently, at an annual average growth rate of 8% from 2003 to 2012. Meanwhile, Australia’s ferrous scrap export increased at an average rate of 9% in the same period. EU27’s ferrous scrap export was significant, at 47 million tonnes in 2012. However, its import volume was also significant, at 31 million tonnes in the same year. Thus its total net export volume in 2012 was 16 million tonnes. Based on net export volume, EU 27 registered an average growth rate of 16% from 2003 to 2012.