Synopsis:
SEASI aounced that in the first half of 2023, ASEAN-6 steel demand experienced a slight decline of 2.5% year-on-year, primarily due to a significant decrease in Vietnam's steel demand. However, Indonesia's steel demand surged by double digits, helping to stabilize the regional steel demand.
Article:
Indonesia's steel demand reached 9 million metric tons, a remarkable 38% y-o-y increase. Flat steel demand soared by 2 million metric tons to 5.4 million metric tons, mainly driven by a substantial increase in hot rolled plate and hot rolled coil demand. This growth could be attributed to the relocation of the capital city and increased investments in new ports and shipbuilding. Long steel demand also grew by half a million metric tons, reflecting the expanding construction sector.
Malaysia's total steel demand continued to rise moderately, with a 7% increase in the first half of 2023. Long steel demand grew by 19% y-o-y, or 200k metric tons, to 1.3 million metric tons, driven by ongoing construction activities. However, flat steel demand declined by 5% y-o-y to 1.8 million metric tons. While demand for hot rolled plate increased by 34%, demand for hot rolled coil and cold rolled coil decreased, possibly due to the increase in electricity tariffs affecting energy-intensive industry production.
The Philippines' ongoing construction activities positively impacted steel demand, leading to a 5% y-o-y increase in the first half of 2023. Long steel demand rose by 400k metric tons to 3.2 million metric tons, while flat steel demand slowed down by 7% to 1.6 million metric tons.
Singapore's steel demand recovered significantly, with a 14% y-o-y increase to 1.4 million metric tons. Long steel demand jumped by 43% y-o-y to 1.2 million metric tons, largely due to the backlog of construction projects resuming after the pandemic. Flat steel demand, however, dropped by half to 181k metric tons in the same period. Hot rolled plate imports were entirely re-exported to Batam for Indonesia's shipbuilding industry.
Thailand's overall economy slowed down since before the pandemic, with construction activities remaining quiet and manufacturing sectors not picking up quickly enough to boost the steel market. Steel demand continued to shrink by 3% y-o-y to 8.3 million metric tons in the first half of 2023. Flat steel demand dropped by 3% to 5.2 million metric tons, and long steel demand dropped by 2.5% to 3.1 million metric tons in the same period.
Vietnam's steel demand stagnated even before the pandemic and continued the same trend. Total steel demand dropped by 28% y-o-y to 9.3 million metric tons in the first half of 2023. Flat steel demand contracted by more than a million metric tons to 4.5 million metric tons, and long steel shrank by 1.5 million metric tons to 4.7 million metric tons in the same period. This decline was mainly due to the weakening construction sector, high interest rates, lower demand, and electricity shortages disrupting manufacturing activities.
Conclusion:
Despite the challenges posed by the global economic situation and the lingering impact of the pandemic, ASEAN countries' steel demand has shown resilience, largely supported by ongoing construction projects in the region. While some countries, such as Vietnam, experienced significant declines, others, like Indonesia, witnessed substantial growth. As governments in the region launch infrastructure projects, it is expected that steel demand will be further boosted in the near future, putting the region's steel demand back on its normal growth trajectory.
Source: STEELGURU
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