Steel consumption in the ASEAN-6 countries is expected to decline by 2.1 percent to 79.3 million mt in 2020 mainly because of a drop in the Philippines, Malaysia and Thailand, Yeoh Wee Jin, secretary general of SEAISI, has said during an e-conference held by the SEAISI.
The largest fall in demand is expected in the Philippines, with an anticipated fall of 8.1 percent this year, which reflects the sharp decline in construction activity during Covid-19 pandemic. This will impact the total imports of billet in the ASEAN region, as the Philippines is one of the main buyers. Steel demand is foreseen to drop by eight percent in Malaysia and by 6.6 percent in Thailand.
Nevertheless, Vietnam and Indonesia are expected to register positive growth of steel consumption in 2020, adding four percent and three percent, respectively. Vietnam is the only country in the ASEAN-6 which is expected to post positive GDP growth for this year – of 2.8 percent, according to the World Bank. Strong demand for HRC in Vietnam has supported mills from India, the CIS and even Turkey, when they faced the slowdown of demand in their local markets during the pandemic.
“Covid-19 has a significant impact on ASEAN economies, with most expecting a V-shape recovery by 2021,” Yeoh Wee Jin mentioned in his presentation. Historically, ASEAN countries have recovered very fast since the Asian financial crisis in 1997 and it usually takes not more than one year for them to get back on track. In 2021, steel consumption in the ASEAN-6 is expected to rise by five percent to 83.2 million mt, including a fast recovery in the Philippines where demand is foreseen to increase by 6.9 percent, and in Thailand with expected five percent growth. At the same time, demand in Vietnam and Indonesia will rise by a modest 3.3 percent and 3.4 percent in 2021 respectively.