Special Feature: Steelmaking Capacities Development in ASEAN

Posted on 17 March 2021

ASEAN is one of the fastest growing regions in the world and is an attractive market for many potential investors. However, overinvestment is a critical issue which is ongoing in ASEAN, especially in the Iron and Steel Industry. This article aims to provide some updates on the Capacity Development in the ASEAN market:

  • Due to COVID-19, most of the investments from China have been delayed, according to sources known to SEAISI. Some have been postponed and some others are undergoing review. 
  • The second phase expansion plan of the joint venture between Indonesian PT Krakatau Steel and South Korean POSCO is expected to begin by year 2025 of a capacity 3.0 million tonnes. The integrated steel facilities, which comprise a blast furnace, a sintering plant, a coke oven plant and a plate mill will bring a total annual capacity of 6 million tonnes. Krakatau Steel and Krakatau POSCO combined will reach a total capacity of 10.0 million tonnes of steel output by 2025 when completing the Cilegon Steel Cluster.  
  • PT Gunung Raja Paksi Steel is commissioning a new blast furnace with a capacity of 1.5 million tonnes to produce slab in West Java of Indonesia. The plant is expected to be commissioned in Q2 2021.
  • Hebei Bishi Group, China has planned to construct an integrated steel mill of a capacity of 3.0 million tonnes in 2020/21 in Kendal, Central Java, Indonesia, followed by an expansion of another 3.0 million tonnes capacity in the future.
  • PT Dexin Steel recently started a Blast Furnace operation capacity of 3.5 million tonnes in Morowali Industrial Park, Central Sulawesi, Indonesia. Phase 1 would focus on billets and wire manufacturing. In the future, the company plans to produce billets, wires, slabs, and bars by raising its capacity in 2 more phases, 2.5 million tonnes by Dec 2022 and 14.0 million tonnes in the future. The total target capacity is 20.0 million tonnes.
  • The newly proposed investment from the WenAn Iron and Steel project in Samalaju, Sarawak State, Malaysia is expected to have an integrated steelmaking capacity of 10.0 million tonnes of long and flat products. There was some discussion about starting with a 5.0 million tonnes of capacity as phase 1. However, since the COVID-19 pandemic started, there is no significant news about the progress apart from “construction is ongoing”.
  • Malaysian Oriental Shield, a long product steel producer, expanding its business in flat products, has taken over the assets of Megasteel and they plan to restart the ceased operations of Megasteel. The integrated plant has a production capacity of 3.0 million tonnes per year of flat products. They are expected to start operations in 2021. The company is reportedly considering a further investment into a blast furnace (BF) project with the first phase involving an investment of RM3 billion comprising a 3,000 cubic metres BF, sinter plant, coke oven and two converters to add its existing three arc furnaces, ladle furnace and caster. Lion Industries said production capacity from these projects will be 5.5 million tonnes per annum of which 4.5 million tonnes will be to produce HRC and 1 million tonnes will be for the manufacture of high-grade polished shaft bars and wire rods.
  • Kunming Iron and Steel plans to build an integrated steel mill in Myanmar of a capacity of 4.0 million tonnes producing HRC, bars, rods and sections, in 2 phases of 2.0 million tonnes each. They are at feasibility study stage at the moment. Kunming Iron and Steel in February 2021 has been acquired by Baowu Steel, the world’s largest steel producer.
  • Panhua Group from China is considering building an integrated plant in Misamis Oriental province, Philippines. It will produce steel slab, galvanized coil and color-coated coil with a total capacity of 10.0 million tonnes over three phases. There have been reports that Baowu is exploring joining the Panhua Group in this investment.
  • A Joint Venture between China’s HBIS Group and Philippine’s SteelAsia Manufacturing Corporation was supposed to set up an 8.0 million tonne long products capacity in Lemery, Batangas in two phases of development by 2026. The project appears to be under review due to COVID-19.  
  • For long products, SteelAsia Manufacturing proposed a new EAF capacity of 1.2 million tonnes in Concepcion, Tarlac to produce wire rods. Another new plant in Compostela, Cebu facility would have EAF capacity of 0.8 million tonnes producing wire rods and rebars. A third EAF facility planned in Lemery, Batangas, is an integrated steel mill with an annual capacity of 0.5 million tonnes producing steel sections.
  • Hoa Phat Group’s no. 1 and no. 2 blast furnace with a capacity each 1.0 million tonnes are currently in operation; these are for long products. There will be another 2 blast furnaces planned for the year 2020/21. Blast furnace no.3 and no. 4 would also have a capacity 1.0 million tonnes each are now being constructed in the same site, Dung Quat. The new capacities will be for flat products.
  • Formosa Ha Tinh is one of the biggest foreign investment in the Ha Tinh province, Vietnam. They are operating 2 blast furnaces at an annual capacity of 7.5 million tonnes to produce about 6.0 million tonnes of flat and about 1.5 million tonnes of long products. It has initial plan for 2 expansions of which each phase will increase the capacity by 7.5 million tonnes. 
  • Vietnam Hao Sen group has abandoned its unfinished construction of a blast furnaces of a total capacity of 6.0 million tonnes a year, an investment of $10 billion.   
  • Cambodia is expected to have its own steelmaking facility should China Baowu Steel Group relocates its 2 blast furnace facilities with a combined capacity of 3.1 million tonnes from Xinjiang Autonomous Region, China. 

Sources: Various news publications, SEAISI Interviews

Source : SEAISI