Southeast Asia is seeing a boom in steel capacity investment across the region thanks to its emerging economies and growing demand. The growth of this capacity will be a double-edged sword for Chinese steel exports, however, with some investments increasing the need for imports of semi-finished products, Kallanish notes.

According to the South East Asia Iron & Steel Institute (Seasi), apparent steel consumption in the Association of Southeast Asian Nations (Asean) increased 8.8% annually from 2009 to 2015, triggering a wave of investments (some sumarized in the tables below). Malaysia and Thailand also have significant investments ongoing from China and Japan.

Asean's steelmaking capacity is mainly composed of small electric arc furnace facilities and significant re-rolling capacity, Seaisi notes. Ongoing Asean steel investments also include a large amount of re-rolling capacity, which will depend heavily on semis imports. Last year Chinese steel exports to Southeast Asia were up 13.08% to 39.13 million tonnes, even though the country’s total export dipped. Southeast Asia has been by far the largest growth area for China in the last few years. 

However, with more steelmaking capacity coming on stream in Asean, growth in demand for Chinese steel is increasingly limited. This will be exacerbated by trade barriers in reaction to large Chinese export volumes. Chinese traders will have to work ever harder if they are to maintain their share of steel sales in Southeast Asia in the coming years.

Philippines

Vietnam

Indonesia

Source: South East Asia Iron & Steel Insititute