ACCOUNT PROFILE

ASEAN-6 Steel Industry: Who are The Potential Exporters and Who are the Remaining Importing hub? The Update of Steel Trade in ASEAN-6 in the first quarter of 2021

Posted on 05 August 2021

According to Mr. Yeoh Wee Jin’s presentation at SEAISI 50th Anniversary e-Conference & Exhibition, finished steel export in Indonesia, Malaysia and Vietnam registered a significant growth rates despite of the pandemic and economic slowdown in 2020.

Indonesia’s finished steel export have been increasing in the past mainly from increase in capacity and exports of plates and stainless steel. In 2020, export of hot rolled plate increased 22.7% y-o-y to 955,000 tonnes. The volume, however, dropped from 222,283 tonnes in the first quarter of 2020 to 128,386 tonnes in the same period of 2021. 

The main destinations for Indonesia’s plates was to China. Indonesia’s plate export to China jumped to 482,996 tonnes in 2020 from the low base of 2,000 tonnes in 2018 and 20,000 tonnes in 2019. This was because the export started from May 2020 onwards and it continued to rise to 47,824 tonnes in the first quarter of 2021. Indonesia continued to export plates to Spain, Malaysia and Thailand during this quarter.

Export of stainless hot rolled coil remained significant, at 339,146 tonnes in the first quarter of 2021. Around half of the volume was shipped to Thailand, followed by the export to Vietnam, Myanmar and China. 

Apart from export of finished steel products, Indonesia’s export of billet and slab jumped significantly in the first quarter of 2021, at 459,731 tonnes and 75,527 tonnes, respectively. Half of the billet export was to China, followed by export to Taiwan, Thailand and Philippines. Indonesia’s export of slab at 75,527 tonnes in the first quarter of 2021 was mainly shipped to China, Thailand and South Korea.

Malaysia’s finished steel export jumped significantly, led by the export of long products. Bar export in Malaysia jumped from 1.3 million tonnes in 2019 to 2.5 million tonnes in 2020. The export continued to increase from 184,384 tonnes to 691,796 tonnes in the first quarter of 2021. Almost all of bar export from Malaysia was shipped to China whereas export to other countries, such as Singapore and Myanmar, was at a few thousands of tonnes in the first quarter of 2021. 

Wire rod export at 3.3 million tonnes in 2020 was a significant increase from 1.3 million tonnes in 2019. The export volume, however, slowed down by 39% to 566,691 tonnes in the first quarter of 2021. Major market for Malaysia’s wire rod was China. Half of the wire rod export in 2020 was sent to China.

However, the volume to China dropped 32% y-o-y to 165,498 tonnes in the first quarter of 2021, followed by the export to Thailand, at 134,716 tonnes during the same period.  

Note that Malaysia’s long products sector is an overcapacity situation and many local mills have connections with the China, hence these mills were able to take advantage of the strong demand in China to export their wire rods and bars.

Meanwhile, export of most of flat steel products declined by double digits in the first quarter of 2021.
 
Malaysia’s export of billets increased significantly to 1.3 million tonnes in 2020. 85% out of which was the export to China. China remained the largest 

market for Malaysia’s billet export in the first quarter of 2021. However, the volume dropped by half to 131,756 tonnes.

Vietnam’s earlier export increase was due to the export of hot rolled coil. In 2020, Vietnam export various products to other countries. Export of wire rod increased by a double digit of 21% y-o-y to 1.16 million tonnes in 2020. The export in the first quarter of 2021 continued to increase significantly, to various countries, including Taiwan, Japan, Thailand, China and Malaysia. 

Export of hot rolled coil increased moderately, at 4.3% y-o-y to nearly 800,000 tonnes in 2020, after a big jump of export volume in 2019 against 2018. The export continued to increase (double in volume) in the first quarter of 2021. Major markets were Malaysia, Italy and Indonesia. 

Export of cold rolled coil continued to decline by nearly half to 500,000 tonnes in 2020. The cold rolled coil export dipped moderately, by 10% y-o-y in the first quarter of 2021. Major markets were Indonesia, Malaysia and Thailand.

Export of hot dipped galvanized sheet increased 18% y-o-y to 1.06 million tonnes in 2020. The volume in the first quarter of 2021 continued to double in volume. Major destinations were Thailand, Indonesia and Malaysia. 

Vietnam’s export of billets jumped significantly, from 778,000 tonnes in 2019 to 3 million tonnes in 2020. The export continued to increase significantly, at 24% y-o-y to nearly half a million tonnes in the first quarter of 2021, half of which was to China, followed by the export to Thailand and Indonesia. 

Thailand and Philippines remained major finished steel importers whereas Singapore’s relied heavily on flat steel import to serve domestic demand and to re-export.

Thailand’s finished steel import dropped 11% y-o-y due to the impact of pandemic. Thailand relied heavily on flat steel import, at 80% of total flat steel demand. However, the export recovered with double digit growth rates in the first three months of 2021. Export of hot rolled coil surged 30% y-o-y to 1 million tonnes in the first quarter of 2021. Export of cold rolled coil increased 29% y-o-y to half a million tonnes in the same period. 

Thailand’s finished steel export dropped 19% y-o-y to below a million tonnes in 2020. The volume picked up moderately at 6% y-o-y in the first quarter of 2021.

Philippines’ finished steel import dropped by half a million tonnes to 4.9 million tonnes in 2020 due to the pandemic. Long steel import declined slightly at 1.6% y-o-y to 2 million tonnes in 2020. However, the import dropped significantly in the first quarter of 2021, except the import of bar which grew by three folds in the same period of 2021. This could be a return of construction activities during early 2021.

Import of flat steel continued to decline in the first quarter of 2021, except import of HDG which grew by a double digit growth rate in the same period. This also could be a return of construction activities in the country. There is no export of finished steel in Philippines.

Singapore’s finished steel import dropped 20% y-o-y to 2.7 million tonnes in 2020. Import of long steel dropped 34% y-o-y to 1.2 million tonnes while import of flat steel dropped 4.6% to 1.4 million tonnes in 2020. This could be the slowdown in construction activities due to the lack for manpower during covid-19 pandemic. 

Long steel Import continued to decline in the first quarter of 2021. Flat steel import also continued to contact, except the import of hot dipped galvanized sheet, which surged 48% y-o-y to 31,600 tonnes. 

Finished steel export from Singapore declined 6% y-o-y to 1.5 million tonnes. Export of long steel fell 22% y-o-y to 597.090 tonnes while export of flat steel continued in increase 8% to 908,938 tonnes. Note that Singapore has no flat production, hence most of their flat products imports are usually re-exported.

In the first quarter of 2021, finished steel export dropped 17.8% y-o-y to 305,749 tonnes. However, export of wire rod doubled in volume and export of coated sheets also registered double digit growth rates in the same period.  

All in all, many steel producers in ASEAN countries benefited from strong demand in China and were able to capitalize on demand/supply gaps to export to China and the region.

Pichsini Tepa-Apirak

Source : SEAISI