ASEAN-6 countries (Vietnam, Indonesia, Thailand, the Philippines, Malaysia and Singapore) managed to increase their steel exports significantly - by 34 percent - in the January-May period this year owing to a sharp increase in inquiries from China, while intra-ASEAN trade also improved further. Moreover, stronger demand for ASEAN producers’ products emerged from such developing Asian countries like Cambodia and Myanmar, according to presentations during an e-talk held by SEAISI on October 6.
Total ASEAN steel exports amounted to 8.9 million mt in the January-May period this year, according to Wong Wah Sum, head of Resource Centre at SEAISI. China claimed the highest share of exports from the ASEAN countries, with 35.3 percent. During the Covid-19 pandemic worldwide, China increased its imports of steel, mainly semis and flats products, with total import shipments reaching 18 million mt in the January-July period. And though Southeast Asian exporters were included in the top-four suppliers to China, they grabbed more than a 20 percent share of the import market in China, taking them all together.
In the semi-finished import market in China, Vietnam, Indonesia and Malaysia took third, fourth and fifth places respectively just after India and Russia. Also, Malaysia became the number one bar and wire rod exporter to China, as the newly-built mill Alliance Steel, backed by Chinese investments, has been trying to increase exports, seeing lower domestic demand. “Price is very important. Chinese traders were buying [import] billet to fill in the finished products market. Some mills have more rolling capacities than crude steel… But they [Chinese traders] are not buying any more, at least not as much as three months ago,” said Henry Chang, country representative of Ferrotrade S.A. Philippines, during the panel discussion. Total semis exports from ASEAN-6 countries amounted to 2.3 million mt in the January-May period this year, with exports to China at 1.5 million mt, while intra-ASEAN region sales were just 660,000 mt, according to the presentation made by Pichsini Tepa-Apirak, senior technical manager at SEAISI.
Intra-ASEAN sales also increased during the period. For instance, in the long steel segment, the share of China and the share of intra-ASEAN-6 export shipments was the same - 1.2 million mt in the January-May period each. “Cambodia becomes a major market for Vietnamese long steel [1.1 million mt in 2019]. Geographical advantage could be one of the reasons,” Pichsini Tepa-Apirak said. Bangladesh and Myanmar have become new emerging markets for suppliers from Indonesia. At the same time, Malaysia, which has been focused on trading of longs to ASEAN-6, has shifted its focus to sales to China and Myanmar during the Covid period.
In the flat steel segment, trading intra-ASEAN-6 has been the highest - 1.2 million mt. “HRC exports from Vietnam and Indonesia [for the latter, it is for stainless HRC] increased significantly, mainly to ASEAN-6 countries. Pakistan seems to be one of the common destinations for Vietnam’s HRC,” according to Pichsini Tepa-Apirak. “There is a large emerging market for HR and CR sheets in Malaysia. Vietnam and Indonesia are the two ASEAN countries supplying HRC to Malaysia. China is supplying coated steel to Malaysia,” Wong Wah Sum said.