The Southeast Asia Iron and Steel Institute (SEAISI) sees ASEAN-6 – Vietnam, Thailand, Singapore, Philippines, Malaysia, Indonesia – steel demand rising in 2022, but overcapacity remains a concern in the region.

ASEAN-6 steel demand is projected to rise 3.6% to 77.9 million tonnes in 2022 from 75.3mt in 2021, association secretary general Yeoh Wee Jin said at SEAISI’s Steel Mega Event & Expo in Subang Jaya attended by Kallanish.

However, the growth is still subject to significant global risks from high inflation and volatile prices amid slowing demand in China and the region.

According to Yeoh, Vietnamese steel demand is expected to grow 2.5% on-year to 22.6mt this year, while Thailand and Malaysia steel demand are seen to increase by 1.6% and 7.8% respectively to 18.8mt and 7.6mt.

Meanwhile, steel demand in Singapore is forecast to rise 0.8% to 2.5mt, while demand in the Philippines and Indonesia is expected to expand 5% each to 10.2mt and 16.2mt respectively.

Overcapacity in ASEAN is nevertheless expected to lead to industry consolidation in the region, Yeoh said at Monday’s event.

"Current capacity in ASEAN is about 71.8mt. The new capacities that we have tracked are roughly about 90.8mt. With all these capacities coming in, we are looking in the future at 162.6mt coming up sometime towards 2030," he observed.

According to him, the overcapacity stems from rapid capacity expansion in Indonesia, Vietnam and Malaysia.

He noted that Vietnamese mills are shutting down blast furnaces amid weak demand, while more steel capacities are being approved in Malaysia.

He also highlighted that Malaysian steel demand was at best 10m t/year, but the current capacity is 16m t/y and is expected to reach 46m t/y with the new investments.

While huge Chinese steel plants are setting up in the region to sell the steel back to China, Yeoh expressed concern over the steel market amid weak demand and overcapacity.