Despite growing demand in the region, steel trade in the Association of South East Asian Nations (Asean) is falling sharply this year, according to the South East Asian Iron and Steel Institute (Seaisi). While Vietnam now has the largest steel demand in the region, it is also the key regional supplier of steel exports, Kallanish notes.

Steel demand in the Asean-5 is expected to increase 4.8% year-on-year to 77.7 million tonnes this year and 6.8% to 83mt in 2018, notes Seaisi secretary general Tan Ah Yong in his monthly message to members. Vietnam in particular will continue to grow strongly, becoming the tenth-largest steel consuming nation this year at 27mt.

Despite this, steel imports into the region over January-June 2017 were down -11% y-o-y to around 25mt, while intra-Asean trade was down -6-7% to 1.4mt, Seaisi says. China’s exports to the Asean-6 slumped -39.31% to 11.81mt over the same period.

In terms of intra-Asean trade most products saw a decline in volume, apart from cold rolled coil, and Vietnam took an increasingly important role in flat product supply in the region. Intra-Asean long product trade dropped around -12.5% to below 400,000t over the first half of 2017. Imports of hot rolled coil, meanwhile, dropped -23% y-o-y to 65,000t.

Vietnam was well placed to take advantage of the two stronger sectors for intra-Asean trade, CRC and colour-coated sheet. Intra-Asean CRC trade increased 55% y-o-y to 219,000t in H1, of which trade from Vietnam increased from 100,000t to 154,000t.

For colour-coated sheet, total intra-Asean trade fell from nearly 500,000t in H1 2016 to 407,000t in H1 2017. Of this, Asean imports from Vietnam fell -18% but were still dominant at 321,000t. Considering Vietnam’s growing capacity and new HRC capability, Vietnam’s role in the region is likely to increase further.