Posted on 22 Jun 2021
Steel consumption in Thailand, Vietnam, the Philippines, Indonesia, Malaysia and Singapore is likely to increase by 6.1pc from last year to 74.9mn t in 2021, the Southeast Asia Iron and Steel Institute (Seaisi) said at a virtual conference this week.
The projection is in line with Seaisi's November 2020 demand forecast of 73.3mn-75.3mn t for the six Association of Southeast Asian Nations (Asean) countries, or Asean-6. Vietnam and Indonesia are expected to reach or exceed pre-pandemic steel output levels this year.
The Asean-6 countries' steel consumption in 2020 was an estimated 70.6mn t, down by 12.1pc from 2019. And despite the projected recovery, the demand forecast this year is 6.7pc lower than the 80.3mn t consumed in 2019.
Public infrastructure investment and public/private investments in Asean-6 countries are expected to drive a recovery in their construction sectors, with most countries aiming to vaccinate the bulk of their populations by the first quarter of 2022. The Asean-6 countries' construction growth rate is expected to range from 1.9-26.9pc year on year in 2021, according to GlobalData.
But the region's economic recovery may be challenged by the worsening pandemic and renewed lockdowns, rising global steel prices amid a shortage of raw materials, global shipping backlogs and a semiconductor shortage that is curbing auto output, Seaisi said.
Auto sales, which drive flat steel demand, are forecast to increase by 21.5pc and 5.4pc in the Philippines and Malaysia respectively in 2021. Auto sales are forecast to drop by 22.3pc in Indonesia and fall by 5.3pc in Thailand.
Asean-6 countries' long steel products markets are 96pc served by local production, while demand for flats is still mostly served by imports, even during the pandemic. Asean-6 net imports of flats rose by 6.3pc on the year in 2020, Seaisi statistics show.
Asean-6 countries exported 17.6mn t of steel in 2020, up by 13pc from 2019. Most of the steel products were sold to China. Vietnam's export growth was driven by hot-rolled coil, while Malaysia and Indonesia's export growth was the result of rising capacity and exports of longs, semis, plates and stainless steel, Seaisi said.
Asean-6 countries imported 41.9mn t of steel in 2020, down by 18.2pc from 2019 as global steel trade was slowed by the pandemic.
Source:Argus
