Steel expansion projects in SE Asia face delays due to Covid-19

Steel expansion projects in SE Asia face delays due to Covid-19

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The ASEAN region has been one of the most attractive markets for steel capacity construction and many Chinese investors have announced projects there over the past few years. However, the recent Covid-19 pandemic has caused many companies to postpone their projects, though some of them are still in place and may be put into operation by 2025.

“Due to Covid-19, most of the investments from China have been delayed, according to sources known to SEAISI. Some have been postponed and some others are undergoing review,” the South East Asia Iron and Steel Institute (SEAISI) has said in its latest report.

According to market sources in Indonesia questioned by SteelOrbis, the flat steel projects in the country will be finally completed, with the pandemic just delaying their launch. For instance, the new BF of 1.5 million mt of Gunung Raja Paksi is near to completion, which will lower the slab imports of the company in the future. The project of PT Krakatau POSCO for 3 million mt of crude steel per year is going to be finished by 2025, much later than initially planned, but “it is expected to cover growing demand, as Indonesia needs it,” a local source said. On the contrary, billet and long steel production expansion in Indonesia may lead to the oversupply in the market, sources believe. PT Dexin Steel with a capacity of 3.5 million mt of steel has been actively developing its billet exports, to China in particular, not receiving enough demand in the local market.

Market sources expect the restart of the 3 million mt of flat steel capacities of Megasteel in Malaysia, as the country does not have its own HRC production now, but the restart has been delayed a few times already.

The highest integrated steel capacities among all Southeast Asian countries – 20.5 million mt of steel in total – have been expected to come on stream in the Philippines. All these projects have faced delays in construction amid “the significant impact of Covid-19 on the overall economy in the Philippines,” a local source said.

In Vietnam, for now the most-awaited launch is Hoa Phat’s Dung Quat 2 Phase, which will help to boost HRC production and to increase its presence in the local market, which will further cut the import dependence of Vietnam. According to the company’s latest announcement, the launch of Phase 2 is planned for early 2022.

-Country

Company name

New capacity, per year

Timeline to launch

Status

Indonesia

PT Krakatau POSCO

3 million mt of crude steel

By 2025

Was postponed

Indonesia

PT Gunung Raja Paksi Steel

1.5 million mt of slabs

Q2 2021

Near completion after delay

Indonesia

Hebei Bishi Group

3 million mt of crude steel (possible for expansion to 6 million mt)

Unknown

Postponed and may be canceled due to environmental issues

Indonesia

PT Dexin Steel

2.5 million mt of crude steel under II phase

14 million mt of crude steel under III phase

II phase by Dec 2022

III phase Unknown

Unknown

Malaysia

WenAn Iron and Steel project

10 million mt of crude steel in total for longs and flat production (5 million mt in I phase)

Unknown

Pandemic delays contraction start, construction reported as “ongoing” now

Malaysia

Oriental Shield takes over Megasteel

3 million mt of flat steel.

After expansion – 5.5 million mt (4.5 million mt of HRC and 1 million mt of high-grade polished shaft bars and wire rods)

2021 for 3 million mt of flat steel capacity

Delayed since 2019

Myanmar

Kunming Iron and Steel (purchased by Baowu in Feb 2021)

4 million mt of HRC, bars, rods and sections (in 2 phases of 2 million mt each)

Unknown

Feasibility study stage

The Philippines

Panhua Group

10 million mt (major products include slab, galvanized coil) and color-coated coil)

Unknown, previous timeline was 2022

Work on plant started in 2019, it was temporarily stopped in 2020 due to pandemic

The Philippines

China’s HBIS Group and Philippine’s SteelAsia Manufacturing

8 million mt of longs steel

Unknown now, initially in 2 phases by 2026

Under review due to Covid-19

The Philippines

SteelAsia Manufacturing

1.2 million mt EAF in Tarlac for wire rod output

0.8 million mt of EAF in Cebu for wire rod and rebar

0.5 million mt in Batangas for sections production

First launch expected for 2021, but could be postponed due to pandemic

In progress, faced delays

Vietnam

Hoa Phat’s Dung Quat 2 project

5 million mt of crude steel for HRC production (in phases)

Launch planned for early 2022

Under construction

Vietnam

Formosa Ha Tinh

2 expansions 7.5 million mt each

Unknown

No info about status

Vietnam

Hoa Sen group

6 million mt

Canceled

Canceled

Cambodia

China Baowu Steel Group

2 BFs with total capacity of 3.1 million in total are expected to be replaced from China

Unknown

Unknown

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