Hanoi Iron and Steel (HSV) – The ASEAN steel industry still depends almost entirely on imports of iron ore and scrap. Malaysia, Vietnam and Indonesia are major iron ore importers in the region.
ASEAN steel production facilities mainly use EAF technology. However, recent developments and new investments in the region have led to more integrated steel facilities (iron and steelmaking), in the form of blast furnaces and oxygen blast furnaces (BF/BOF).
Total BF/BOF capacity in the region doubled in output from 15 million tons in 2018 to nearly 30 million tons in 2020 while EAF capacity gradually increased to over 70 million tons in the same year. As a result, demand for iron ore has increased significantly in recent years, while scrap demand has remained largely unchanged.
With the new investment, another 90 million tons of new BF/BOF capacity is forecast, if all planned projects become operational. Therefore, the demand for iron ore in ASEAN is expected to increase significantly in ASEAN in the future.
The ASEAN steel industry still depends almost entirely on imports of iron ore and scrap. Malaysia, Vietnam and Indonesia are major iron ore importers in the region. Vietnam's imports continue to increase from 1.9 million tons in 2016 to over 50 million tons in 2021. Most imports into ASEAN come from Brazil (46%), Australia (34%) and Malaysia (10%).
Malaysia's iron ore imports have remained significant over the past five years at over 20 million tonnes per year. However, Malaysia is also a major exporter of iron ore. That means Malaysia is a transit point for redistributing iron ore into the ASEAN region.
Besides Malaysia, other major iron ore exporters in the region include Indonesia and Myanmar. The main export markets for ASEAN iron ore are China (71%), Vietnam (23%) and Indonesia (13%).
Since most of ASEAN's steel production bases are EAF, scrap is a very important raw material in this region. Scrap demand in the region reached a high of 39 million tons in 2021. Indonesia and Vietnam have the largest scrap demand in the region. Indonesia's scrap demand increased significantly from 9.3 million tons in 2019 to 14.2 million tons in 2020 and 16.3 million tons in 2021.
Vietnam's scrap demand has remained at around 10-11 million tons/year over the past few years, in contrast to the rapid increase in iron ore demand during the same period. Thailand's scrap demand fell from 6-7 million tons per year to 4-5 million tons per year in 2019 and 2020 during the pandemic. Scrap demand rebounded to pre-pandemic levels at 6 million tons in 2021. Meanwhile, scrap demand in Malaysia and the Philippines was low at 3.5 million tons and 1.5 million tons in 2021, respectively.
Many countries in the ASEAN-6 bloc still have to depend on imported scrap, except the Philippines and Singapore. Vietnam is the largest scrap importer in the region, at 5.4 million tons in 2021. Indonesia's imports decreased from 2.6 million tons in 2019 to 1.4-1.5 million tons in 2020 and 2021. The slowdown may be heavily influenced by the pandemic. The Indonesian government has introduced new scrap import policies to ease import restrictions and control metal impurities at 2% for ease of import as well as to avoid hazardous waste. Malaysia and Thailand import about 1-2 million tons/year.
The Philippines and Singapore are the only two countries that are major scrap exporters, with exports of nearly one million tons per year.
Source: http://vsa.com.vn/trien-vong-ve-quang-sat-thep-phe-lieu-asean/