Steel mills in Southeast Asia add capacity

Steelmakers in Southeast Asia are rapidly adding primary and secondary capacity amid rapidly growing domestic demand, especially for construction steel.

Countries such as Indonesia, the Philippines, Malaysia and Vietnam are building additional rebar and wire rod capacity to meet growing demand from the infrastructure sector. This has led to an increase in import demand for semi-finished products such as billet and plate, not only from the traditional supplier of China, but also from suppliers such as Russia and the countries of West Asia and South America over the past year.

Growth in infrastructure demand for construction steel is likely to grow most sharply in Indonesia, the Philippines and Vietnam this year, driven by government-funded infrastructure projects.

The region is also expanding its core capacity, which currently mainly consists of electric arc furnaces. But countries such as Vietnam, Indonesia and Malaysia are rapidly ramping up blast furnace capacity.

Chinese companies are investing in primary steel capacity in the region as China hopes to move steel capacity overseas to reduce domestic pollution.