SEAISI webinar: Cautious optimism for ASEAN steel demand for 2023-2024 despite weak H1

Though 2022 was difficult for most ASEAN countries in terms of steel demand and the challenges continued in H1 of 2023, overall forecasts in all ASEAN-6 countries for apparent steel consumption for this and next year are positive, according to the speakers at "2023 ASEAN Steel Demand Forecast Event" held by SEAISI on August 24. Nevertheless, the optimism is very cautious with only small increases predicted.

Demand in the ASEAN region is forecast to increase by 6.2 percent from 2022 to 77.1 million mt in 2023 and to grow further by 5.7 percent in 2024, according to the worldsteel official report presented during the SEAISI webinar. Notably all countries are expected to see demand improvement this year, but the strongest support will come from Indonesia and Malaysia, with Indonesia leading the race, though even here the pace will be slower than in the previous year, according to the countries’ speakers.

More specifically, the Indonesian market is expected to remain supported by development of infrastructure and large-scale construction projects as a new capital - Nusantara, located on Borneo Island, which is expected to replace Jakarta, already overcrowded. The new capital investments are expected to reach $32 billion by 2045. As a result, also based on expected GDP growth, the apparent steel consumption in the country is expected to increase by 5 percent in 2023 and by 5.3 percent in 2024, which is still a bit slower than 7.3 percent growth in 2022. 

In Malaysia, “the slow growth will be recorded [in 2023] in the construction sector due to labour supply issues, increased costs of operations and global economic uncertainty,” MISIF representative said in the presentation. The total apparent steel demand will add 4.1 percent in 2023 and 2024, though the growth of the real demand is expected to be 3.6 percent in 2023 and 4.8 percent in 2024 with the export volumes are expected to increase further, taking into account growing steel capacities in the country. 

Meanwhile, following a significant steel consumption drop of 17 percent to 8.99 million mt in Vietnam in the first half of 2023, the representative of Vietnamese Steel Association have announced still rather positive forecast for this year, with 1.1 percent increase to 22.41 million mt emphasizing their hopes for higher demand for automotive, shipbuilding, manufacturing and electrical appliances. 

In the Philippines, despite drop in demand in the second quarter, for the whole 2023 year the industry association is still expecting some small increase – to 10.2 million mt versus 9.9 million mt recorded in 2022. This has been partially attributed to the expectations of the GDP growth at 6 percent in 2023, which is still lower than 7.6 percent increase in 2022, but over below 6 percent expected earlier. 

Thailand, being the most developed in terms of both demand and production ASEAN countries, is forecasted to show only marginal changes in steel consumption, which is assessed as positive after the sharp fall in the previous year. 

After the stable 2022 year, Singapore will show marginal increase in steel demand as well amid large pipeline of construction projects in progress with the public sector remaining the key growth driver. 

Forecast for apparent steel consumption for ASEAN-6 

* - forecasts are provided by the industry associations