ASEAN is not self-sufficient in steel production and is quite reliant on imported steel. Most of the steel companies are mini-mills. Semi-finished steel production is not sufficient in the region. Out of the total 77 million tonnes of finished steel demand in 2016, less than 32 million tonnes were supplied by domestic production and only 20 million tonnes of semi-finished steel were produced in the region.
Semi-finished steel consumption in the six ASEAN countries surged by 13% y-o-y to 35.5 million tonnes in 2016. The average annual growth rate for the period 2010 to 2016 was 3.8%. Production, on other hand, registered a more moderate growth rate of 6.6% y-o-y in 2016 to 20.7 million tonnes. However, for the period of 2010 to 2016, the average growth rate of the semi-finished steel output was only 1% per annum.
Indonesia’s semi-finished steel demand surged by 8% y-o-y to 9.4 million tonnes in 2016. Domestic production dropped slightly, by 2% y-o-y, to 4.7 million tonnes in the same period. Nevertheless, overall domestic semi-finished steel production continued to increase moderately, with an average growth rate of 4.4% per year, from 2010 to 2016, while semi-finished steel demand grew more significantly, by an average rate of 7.6% per year during the same period.
Indonesia’s investment in expansion of semi-finished steel production capacity has increased dramatically. This was mainly due to the investment from Krakatau POSCO in slab production which commenced its operation in 2013. Billet production capacity utilization in Indonesia declined substantially, from 50.6% in 2010 to 39.4% in 2016 and slab production capacity utilization also dropped from 60% in 2010 to 54.6% in 2016.
Malaysia’s semi-finished steel demand declined slightly in 2016, by 3% y-o-y. This was mainly due to a sharp decline in hot rolled coil production in the country. Semi-finished steel production contracted sharply, by 27% y-o-y to 2.8 million tonnes in 2016. Overall, semi-finished steel production in Malaysia declined by an average rate of 11% per annum from 2010 to 2016.
Malaysia expanded its production capacity for semi-finished steel from 9.2 million tonnes in 2010 to 12.4 million tonnes in 2016. However, its production capacity utilization dropped significantly during the same period. Billet production capacity utilization rate declined from 66% in 2010 to 32% in 2016 while capacity utilization rate of slab slumped from 50% in 2010 to only 1% in 2016.
Philippines has only long steel hot rolling production and there is only one billet production facility in the country. Billet demand surged significantly, by 9.6% y-o-y, in 2016. Domestic production registered a double-digit growth rate of 11% y-o-y in 2016. However, the significant growth in billet production came after a sharp decline in 2015. Overall, billet production in the country grew by an average growth rate of only 0.4% per year from 2010 to 2016 while billet demand picked up by an average growth rate of 11% per year during the same period.
Billet production capacity increased from 1.26 million tonnes in 2010 to 1.5 million tonnes in 2016. Capacity utilization rate for billet production was as high as 83.3% in 2010 but dropped to 71.7% in 2016.
Singapore has only long steel production and it is the only country in the region that has not seen any change in steel production capacity. Billet production surged slightly, by 2% y-o-y in 2016. However, overall production from 2010 to 2016 declined moderately, by 5.4% per annum. Capacity utilization rate also reduced from 97% in 2010 to around 70% in 2016.
Thailand’s semi-finished steel demand picked up robustly, by 25% y-o-y in 2016. However, domestic production surged only 3.3% y-o-y in the same year. Overall, production of semi-finished steel in the country declined slightly, by an average rate of 1.3% per year from 2010 to 2016.
Thailand has no capacity expansion on slab production, but billet production capacity increased from 4.2 million tonnes in 2010 to around 5.7 million tonnes in 2016. Slab production capacity utilization rate increased from 40% in 2010 to 45% in 2016. On the other hand, billet production capacity utilization rate dropped by half, from 51% in 2010 to 25% in 2016.
Vietnam had no flat steel production until 2016. Billet demand surged by an average growth rate of 6.6% per year from 2010 to 2016 and billet production in the country continued to increase by an average growth rate of 10% per year during the same period. Vietnam has seen a significant boost in investment of billet production capacity, from 7.4 million tonnes in 2010 to 12.8 million tonnes in 2016. Capacity utilization rate improved slightly, from 58% in 2010 to 61% in 2016.