Apparent steel demand in the first half of 2019 increased 5.9% y-o-y to 39 million tonnes for ASEAN-6 countries. Domestic production surged 9.7% y-o-y to 21.6 million tonnes. Import remained positive at 5.6% y-o-y to 25 million tonnes. Export continue to surge by a double-digit growth rate of 16.7% y-o-y to 7.5 million tonnes in the same period.
Indonesia’s steel demand in the first half of 2019 registered 3% growth rate in the first half of 2019. This was due mainly to the increase of long steel demand while flat steel demand declined slightly in the same period.
Domestic steel production registered a double-digit growth rate at 11-12% in both long and flat steel. Long steel import declined moderately, while export dropped by half to 119,677 tonnes in the first six months of 2019. Import substitution had taken place as domestic producers stepped up production to supply to customers. Just as well, volume of imported steel from China fell as internal demand improves in China.
Flat steel import increased 7% y-o-y to 2.8 million tonnes and export jumped by nearly double in volume to 1.5 million tonnes in the first half of 2019. Export of hot rolled plate and coil continued to increase significantly, as Krakatau Posco and Tsingshan Steel ramped up output for export. Major destinations for hot rolled plate export were India, Europe and Malaysia. Major destinations for Indonesia’s export of hot rolled coil were Taiwan, Malaysia and China.
Malaysia’s steel demand remained somewhat steady with a slight increase of 1.4% y-o-y in the first half of 2019. Domestic production increased significantly, by 44% y-o-y to 2.4 million tonnes, as Alliance Steel continues to ramp up volume. Long steel production surged significantly from 1.6 million tonnes in the first half of 2018 to 2.3 million tonnes in the same period of 2019. Flat steel production was small in volume due to a shutdown of major hot rolled steel producer. However, the volume jumped to nearly double in the first six months of 2019.
Long steel import declined 18% y-o-y to below a million tonnes while export jumped by three folds to half a million tonnes during the same period of 2019. The significant increase was mainly in export of bar and wire rod, as the weak market was unable to absorb all the additional output.
Flat steel import declined moderately, by 6% y-o-y to 2.4 million tonnes. Export increased slightly, by 1.6% y-o-y to 429,838 tonnes in the first half of 2019. All these are due to the weak market situation.
The increase in steel demand in Philippines has slowed down to 4.4% y-o-y from January to June 2019. Total demand registered 5 million tonnes. The bulk of demand was in long steel, and the volume increased slightly, by 2% y-o-y to 3.3 million tonnes during the same period, in line with the growing construction sector. Long steel production increased 7% y-o-y, partly to substitute import. There was no export of long steel. Flat steel demand increased 9% y-o-y to 1.7 million tonnes. There was no domestic production nor export for flat steel.
Singapore’s steel demand in the first half of 2019 declined significantly, by 16% y-o-y to 1.2 million tonnes. This was partly due to the destocking activity due to the merger between two large steel fabricators in the market. Production dropped 11% y-o-y to below 300,000 tonnes. Import declined 4.4% y-o-y to 1.8 million tonnes. This was due to the significant decline in long steel import, at 27% y-o-y from 1.2 million tonnes in the first half of 2018 to 844,752 tonnes. Long steel export dropped slightly, by 3.4% y-o-y to 416,197 tonnes.
Flat steel import into Singapore, on the other hand, surged by a double-digit growth rate at 34.3% y-o-y to 930,158 tonnes in the first half of 2019. Export surged by 100,000 tonnes to 439,394 tonnes during the same period. [why did it surge?]
Steel demand in Thailand declined 2.7% y-o-y to 9.3 million tonnes in the first six months of 2019. Long steel demand dropped moderately, by 5.4% y-o-y to 3.4 million tonnes. Flat steel demand contracted slightly, by 1% y-o-y to nearly 6 million tonnes in the same period of 2019.
Domestic production for long steel in Thailand dropped 9% y-o-y to 2.6 million tonnes from January to June 2019. It could be a result from the going-on destocking activities in the country. Import increased 5.6% y-o-y to 1.3 million tonnes and export was steady with a slight increase of 1% y-o-y to 428,055 tonnes during the same period of 2019.
Flat steel’s production, on the other hand, dropped significantly, by 20% y-o-y to 1.4 million tonnes. Import rose 4% y-o-y to 4.8 million tonnes. A bulk of import was hot rolled coil and coated sheet. Import of coated sheet registered a double-digit growth rate of 16% y-o-y while import of hot rolled coil declined 0.5% y-o-y in the same period.
Flat steel export dropped robustly, by 26% y-o-y to 267,133 tonnes in the first half of 2019. Thailand is not a major exporter for flat steel and export of almost all product groups declined.
Vietnam’s steel demand recovered in the first half of 2019 with a double-digit increase of 22.6% y-o-y to 11.8 million tonnes, supported by the numerous construction projects in the country. Long steel demand grew 11% y-o-y to 5.7 million tonnes and flat steel demand rose by 1.5 million tonnes to 6 million tonnes during the same period.
Long steel production increased 10% y-o-y to 5.7 million tonnes. Import rose sharply, by 47% y-o-y to exceed a million tonnes. Export of long steel continued to increase significantly to 1.1 million tonnes. Half of the export was wire rod and the volume jumped 39% y-o-y.
Remark: More in-depth analysis was presented at the 2019 ASEAN Iron and Steel Sustainability Forum, on 25 November 2019 in Jakarta, Indonesia