Steel consumption in ASEAN-6 has started to recover in 2018, with an estimated increase of around 2-3 million tonnes over 2017 to as much as 77 million tonnes.
All six countries in the region are expected to register positive growth rates in steel demand. Indonesia and Philippines’ ongoing construction projects had helped to boost up more steel demand in 2018, thus contributing to stronger consumption growth rates in both countries in the year.
Indonesia’s steel construction sector is expected to continue to drive demand for long steel. However, flat steel demand growth is expected to be slow, and might even be stagnant. According to IISIA, this is due to the slowdown in some of government’s projects, pending the outcome of the election in April 2019 and the weakening of rupiah against US dollar, which resulted in wait-and-see behaviors.
Philippines’ steel demand in 2018 is expected to recover, with significant growth rate. This is attributed to the significant increase in long steel demand as construction activities continued to be buoyant. However, flat steel demand in Philippines might slow down slightly, mainly because of the closure of Hanjin Philippines shipbuilding operations.
Malaysia, Singapore, Thailand and Vietnam are all expected to register moderate steel demand growth rates in 2018.
Malaysia’s construction sector has been slowing since 2017. However, the government’s effort to boost up economy with on-going infrastructure projects helped the country to register a small rate of growth in steel demand in 2018.
Singapore’s steel demand in the second half of 2018 picked up significantly and resulted in a positive growth rate in steel demand in 2018. This was partly due to the significant increase in flat steel demand. According to trade data, import of hot rolled plates and pipes & tubes showed significant double digit increases in 2018. However, some observers believed that it might be for the purpose of stock piling.
Having seen a double digit decline in steel demand in 2017, Thailand’s steel demand picked up with a moderate growth rate in 2018. This was due to the recovery in both the construction and manufacturing sectors, especially automotive.
Vietnam’s steel demand also recovered with a moderate growth rate in 2018. The government’s emphasis on infrastructure projects to expand cities and its open policy to welcome foreign investors will continue to drive steel demand growth in the future.