According to the data released by the Southeast Asian Iron and Steel Association, it is expected that in 2023, steel demand in the six ASEAN countries (Vietnam, Indonesia, Thailand, Philippines, Malaysia and Singapore) will increase by 3.4% year-on-year to 77.6 million tons. In 2022, steel demand in the six countries increased by only 0.3% year-on-year. The main drivers of steel demand growth in 2023 will come from the Philippines and Indonesia.
The Southeast Asian Iron and Steel Association expects that in 2023, the Philippine economy, although facing challenges from factors such as high inflation and high interest rates, but benefiting from government-promoted infrastructure and power development projects, is expected to grow by 6% to 7% year-on-year GDP, steel demand will increase by 6% year-on-year to 10.8 million tons. Although most of the industry believes that the Philippines’ steel demand has growth potential, the forecast data is too optimistic.
In 2023, Indonesia’s GDP is expected to grow by 5.3% year on year, and steel consumption is expected to increase by 5% year on year to 17.4 million tons. The forecast of the Indonesian Steel Association is more optimistic, predicting that steel consumption will increase by 7% year-on-year to 17.9 million tons. The country’s steel consumption is mainly supported by the construction industry, which has accounted for 76%-78% of steel consumption in the past three years. This proportion is expected to rise given the construction of infrastructure projects in Indonesia, especially the construction of the new capital in Kalimantan. The Indonesian Steel Association believes that by 2029, this project is estimated to require about 9 million tons of steel. But some analysts are cautiously optimistic that more clarity will emerge after Indonesia’s general election.
In 2023, Malaysia’s gross domestic product is expected to grow by 4.5% year-on-year, and steel demand is expected to increase by 4.1% year-on-year to 7.8 million tonnes.
In 2023, Thailand’s GDP is expected to grow by 2.7% to 3.7% year-on-year, and steel demand is expected to increase by 3.7% year-on-year to 16.7 million tons, mainly driven by better demand from the construction industry.
Vietnam is the largest steel demand in the six ASEAN countries, but also the slowest growth in demand. Vietnam’s GDP is expected to grow by 6%-6.5% year-on-year in 2023, and steel demand is expected to increase by 0.8% year-on-year to 22.4 million tons.
Singapore’s gross domestic product is expected to grow by 0.5-2.5% year-on-year, and steel demand is expected to remain flat at around 2.5 million tonnes.
Some analysts believe that the Southeast Asian Iron and Steel Association forecast data is more optimistic, the Philippines and Indonesia will become the region’s steel consumption growth drivers, these countries are seeking to attract more investment, which may also be one of the reasons for the relatively optimistic forecast results.