Home > News > Content
Indonesia's Steel Production Capacity Expansion Will Change The South-East Asia Steel Trade Pattern
- Apr 20, 2018 -

As the world's fifth largest importer of steel, in order to strengthen the steel resources support capacity, the Indonesian steel localization process significantly accelerated.

Recently, the Indonesian Iron and Steel Association released news that it will invest 14.89 billion of dollars in South Kalimantan and the central Weixi to build 3 large steel production plants, in order to improve Indonesia's steel capacity. As Indonesia's steel production capacity expands, in the future, the steel trade pattern of the Southeast Asian market will inevitably change.

Specifically, this change is reflected in the following two areas: 

First, Vietnam, Thailand and other countries of steel in the south-East Asian region in the circulation will be reduced. In recent years, Vietnam, Thailand and other countries to reduce the import of steel, exports of steel increased year by year. In 2017, for example, Vietnam imports nearly 20 million tonnes of iron and steel, down 14.2% per cent, and steel exports to 5.5 million tonnes, up 28.5% per cent year-on-year. The steel exports of these countries are more or less exported to other countries in Southeast Asia, especially the Indonesian steel demand growth is obvious, but also has the geographical advantage, naturally become Vietnam, Thailand and other countries of the main steel exports.

Second, Southeast Asia's demand for imported steel is falling, and regional competition will intensify. At present, the global steel production capacity is generally surplus, Southeast Asia because of the strong demand for steel and steel, respectively, the industrial base is weak, the world's main distribution of steel. In 2017, 30.3% per cent of China's 75.43 million tonnes of steel exports, or 22.78 million tonnes, were consumed by Southeast Asian countries, with 7.63 million tonnes and 3.14 million tonnes of steel exported to Vietnam and Thailand. If 30% of Indonesian steel imports are estimated from China, Indonesia's consumption of Chinese steel was about 1.902 million tonnes in 2017. In the future, with the release of Indonesian steel production speed, domestic steel supply and demand is increasingly balanced, Southeast Asia's demand for imported steel will be reduced. It can be foreseen that with the expansion of Indonesian steel production capacity, China, Japan and South Korea in the Southeast Asian market, "The New Kingdoms", will be more reflected in capital operations, market expansion, and so on, but not the past price areas.