Steel Demand in Southeast Asia to Increase Sharply, Driving Demand for Iron Ore and Scrap Steel
Steel NewsDate: 20-09-2023 by: Nhu Quynh
Although the iron and steel market this year is sluggish, the prospect of increased steel production capacity in Southeast Asian countries next year will lead to a sharp increase in demand for steel ore and scrap steel.
Steel demand in Southeast Asian countries will increase in the near future
At a conference on recycled materials in Southeast Asia in Bangkok, Thailand, experts said Southeast Asia is unlike other parts of Asia such as China, India, Korea,...Southeast Asia is about to shift to using iron ore and scrap steel for steel processing in blast furnaces (BF) and oxygen blast furnaces (BOF) in the near future. These are investments from China to develop the Southeast Asian steel market.
This shows that, in addition to soaring iron ore demand, senior analyst Alexander Kershaw also forecasts scrap steel demand in the region to grow by 50% over the next 10 years.
Under Chinese investment in BOF furnaces under construction in countries like the Philippines, Cambodia will dramatically increase steel production capacity in Southeast Asia. According to the Southeast Asian Iron and Steel Institute (Seaisi), Malaysia will add 30 million tons of new capacity each year, of which 21 million tons per year are expected to start production in 2024; Indonesia will add 3 million tons per year in 2023 and 5.2 million tons per year in 2026, along with 17 million tons per year with an unconfirmed completion date. If new production capacity goes as planned, the growth rate of BOF technology in the region will increase by 25% between 2020 and 2026, while the expansion rate of EAF technology, which uses a lot of scrap steel, will be only 1% from 2020 to 2026.
Scrap steel is expected to increase
According to Mr. Yeoh Wee Jin, Secretary General of Seaisi, although iron ore consumption in the region will increase dramatically in the near future, the demand for scrap steel will remain unchanged. Scrap demand in Southeast Asia will remain strong, and analysts say the strong growth of BOF will also benefit scrap steel demand. Scrap is one of the materials needed for the operation of the BOF furnace.
Although scrap steel demand is expected to skyrocket in the future, under the current situation, demand for secondary raw materials in Southeast Asian countries is expected to decrease. According to Fastmarkets.com, in the period from January to June 2023, Vietnam imported 2.34 million tons of scrap steel, down 7.6% compared to the same period last year. Also in the January–May 2023 period, Indonesia imported 425,459 tons, down 19.5% over the same period last year.
Thus, in the coming time, along with the growth of steel production capacity, the demand for scrap steel in Southeast Asian countries will also grow strongly. Using scrap steel to produce finished steel brings economic benefits and ensures the supply of inputs for steel production.
MRS Steel has given you the necessary information about the steel situation in Southeast Asian countries in the near future. Our company also buys scrap steel in bulk; if you need to sell scrap steel, please contact us here.