Message from Secretary General_November 2016

Posted on 28 November 2016
 

Source: SEAISI
 
The 2016 ASEAN Iron and Steel Sustainability Forum was successfully held at the Landmark Hotel in Bangkok, Thailand from 14 to 16 November 2016. The event was well attended by some 170 delegates from 16 countries.
 
The keynote address, entitled “Steel Industrial Development Oriented to Industry 4.0”, was delivered by Mr. Chen Namchaisiri, Chairman of The Federation of Thai Industries. In his speech, Mr. Chen elaborated on Thailand’s push to transform the country towards a value-based economy. Thus Industry 4.0 carries with it the objective of helping Thai industries to adapt to competitive pressures by increasing the technological base through the development and integration of enabling technologies, creativity and innovation. In this regard, the key components of Industry 4.0 are Cyber Physical System (CPS), Internet of Things (IoT), integration, mass customisation and smart factory. The priorities are sustainable manufacturing / green production, usage of ICT in manufacturing, usage of new materials and high performance manufacturing. Mr. Chen then proceeded to give an example of 3D forming of sheet metal which is a new method to make load optimised profiles with variable cross sections. 

In the session on “Steel Market Developments”, I provided an update on the steel industry situation in ASEAN. Steel consumption in ASEAN-6 expanded strongly in the first half of 2016, surging 19.3% year-on-year to 39.3 million tonnes, contributed by significant increases in both domestic production and imports. All the countries, except Singapore, registered doubled digit growth rates in steel demand with Vietnam leading the pack with a robust year-on-year growth rate of 37.2%. Singapore, however, suffered a sharp drop of 40.3% in steel demand in the first six months of 2016.  

While the exceptionally strong overall year-on-year consumption growth rate in ASEAN-6 in the first half of 2016 was partly attributable to the low base effect of consumption in the corresponding period of 2015, the growth was also propelled by the continuing expansion of steel demand in Vietnam and the Philippines as well as by the recovery in steel demand in Indonesia and Thailand and the stronger than expected growth in steel demand in Malaysia.

The Chinese steel industry, steel pricing and production costs were the focus of the next two presentations in the above session. In his presentation on “China Steel Exports: A Review and Outlook of the Spot Market”, Mr. Keith Tan of S&P Global Platts pointed out that China’s steel exports in 2015 were driven by the exports of square bar which he estimated to be at least 20 million tonnes. He mentioned that the Chinese mills prefer exporting square bar as it yields greater margins than making products. On China’s 2016 steel capacity target cut of 45 million tonnes which was officially achieved at the end of October, Mr. Tan highlighted that 73.5% or 33 million tonnes are capacity that had stopped operation earlier. On commodity pricing, Mr. Tan noted that coking coal prices, which have quadrupled this year, are the biggest contributor to negative margins for China’s domestic mills. He also noted the emergence of Vietnam as an important market for China’s HRC exports and its impact on global steel pricing.

The next presenter, Mr. Tim Hard of The Steel Index, touched on “Asian Production Costs”. He noted that the falling scrap prices, coupled with the rapid surge in coking coal prices, have enabled scrap to significantly close the gap on iron ore and coking coal as a steelmaking ingredient. The result is that EAF production costs are now more competitive than BOF costs. He further noted that steel prices are rising in China and this will benefit EAF producers elsewhere, before it benefits China. He, however, cautioned that the approaching winter will contract scrap supply just as demand is picking up and this could exert some upward pressure on scrap prices.

In the session on “Market Perspectives and Challenges”, delegates to the Forum were updated on the latest situation in the three most important steel consuming sectors in Thailand i.e. the construction, automotive and electrical appliance sectors.

There was also a session on “Product/Technological Developments for Steel Applications” with heavy emphasis on subjects relating to steel applications for the automotive sector.

The construction sector was, however, the main focus of the Forum with three dedicated sessions on this sector viz. “Steel Engineering for Construction Sector”, “Steel for Sustainable Construction” and “Workflow Integration and Management for Construction”. A total of 10 interesting and informative papers were presented by speakers from Malaysia, Philippines, Singapore, Thailand, Taiwan and Switzerland.

Examples of the presentations from the above sessions that attracted rapt attention of Forum delegates include “Agibs Green Integrated Building Solution” by Ajiya Berhad Malaysia which provides the key advantages of speedy construction using less manpower; “Carpet Reinforcement – An Innovative Product Solution for Slab Construction” by NatSteel Holdings Pte. Ltd. Singapore which introduces unidirectional reinforcement bars in roll form to replace the traditional and laborious process of fixing reinforcement using loose pieces of rebars; and “Workflow-Integrated Marketplace for Construction Industry” by Builk Asia Co., Ltd., Thailand which offers 100% free cloud-based construction business management for construction SMEs.

The other sessions in the Forum were centred on environmental and safety matters. The sessions were Energy Savings, Operations Management for Environmental & Safety Improvement and Waste Management and Emissions Control.

The site tour after the Forum attracted close to 60 participants who were divided into two groups with one group visiting the facilities of Sekisui-SCG Industry Co., Ltd. and Thai Metal Trade Public Company Limited while the other group visited the manufacturing plants of NS-Siam United Steel Co., Ltd. and Ford Thailand.

The Institute would like to thank all speakers, chairpersons and delegates for their contributions to the successful conclusion of the 2016 ASEAN Iron and Steel Sustainability Forum. Our thanks also go to the Iron and Steel Institute of Thailand (ISIT) for its support and cooperation in co-hosting this year’s event in Bangkok, Thailand.

    TAN AH YONG



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