At the raw materials and scrap focus e-Event held by the South East Asia Iron and Steel Institute (SEAISI), Dato’ Lim Hong Thye, group managing director of Ann Joo Steel Berhad, and Nghiem Xuan Da, chairman of Vietnam Steel Corporation, talked about raw materials and scrap markets’ situation in ASEAN.
On behalf of Ann Joo Steel Berhad, Mr. Thye stated that they had decided to invest in a mini blast furnace in 2008 as there was issues in scrap availability in Southeast Asia and that it was hard to switch to producing high grade steel using scrap. Thye pointed out that Brazilian miner Vale’s distribution center in Lumut, Malaysia, is a welcome addition that helps solve most the raw material related issues. He also added that Vale’s distribution center will continue to be source of iron ore supply in the region.
Saying Vietnam is in the same position in terms of raw material supplies as compared to other ASEAN countries, Mr. Da stated that steel production in the country increased exponentially in the last five years. In 2021, Vietnam increased its steel production by 3-fold to 23 million mt compared to five years before. While raw material demand tripled last year, iron ore demand is currently at 23 million mt and BF/BOF accounts for 65 percent of the production.
Da highlighted that Vietnam imported about 18-19 million mt of iron ore, 6.5 million mt of scrap and 90 percent of its coking coal requirement to meet demand, given in 2021 scrap and coking coal demand were about 11 million mt and about 10 million mt, respectively. He said even though ASEAN countries can only supply 10-15 percent of scrap, 40 percent of coking coal and 10 percent of iron ore, the upcoming mega projects will increase raw materials’ competition in the region.
Da concluded that the Vietnam Steel Association has submitted a proposal to the government to make investment in iron ore exploration and that steel producers need to partner up with suppliers in Australia, Brazil, China or Chile to ensure stable and long-term iron ore supply, just like Hoa Phat that acquired an Australian iron ore mine with reserves of 320 million mt and Formosa Ha Tinh that established an iron ore base overseas.