Imports of semi-finished products, billet in particular, fell sharply in the Philippines in 2019 mainly due to the rapid increase in domestic steel production, according to Ronald Magsajo, representative of the Philippines Iron and Steel Institute and manager at SteelAsia Manufacturing. Moreover, overall steel consumption was lower due to the slowdown of public construction because of the delay in the national budget approval last year.
Total imports of billets in the Philippines amounted to 2.696 million mt in 2019, down by 16 percent or by more than 500,000 mt from 2018, Mr. Magsajo mentioned during his presentation at the SEAISI e-conference on June 2. At the same time, production of billets increased by 30 percent year on year to 1.915 million mt. Such a sharp hike was explained mainly by growing local induction furnace billet output due to favorable scrap prices. For instance, among ongoing steel projects in the country, Sanjia Steel is expected to put into operation an induction furnace with a 300,000 mt per year capacity and a rebar mill.
Apparent steel consumption of billet in the Philippines declined by 1.4 percent to 4.611 million mt last year, while total demand for finished steel dropped by 6.2 percent to 10.065 million mt, both year on year.
Imports of major long steel products to the Philippines also indicated some declines. For instance, wire rod shipments from abroad were 2.8 percent lower in 2019, while imports of shapes and sections were down 0.7 percent, both year on year.
The outlook for 2020 is negative as the Philippine’s industry will need time to overcome the impact of Covid-19. The pandemic hit private sector construction, which was the driver of steel demand before. According to the government forecast, GDP of the Philippines will contract by 2-3.4 percent in 2020. As secretary general of SEAISI Yeoh Wee Jin mentioned earlier, the Philippines may face an 8.1 percent fall in steel demand this year.