Philippines Steel Consumption To Reach Record In 2019

Steel consumption in the Philippines is forecast to grow 5-6 percent this year to a record 11.1 million tonnes as the country's economy continues to grow.

After rising just 2 percent in 2017 due to high prices, steel consumption in the country jumped about 9 percent last year to a record 10.5 million tonnes, driven by public and private construction projects, said Roberto Cola, president of the Philippine Iron Institute and became in the interview.

The Philippines imports about 70 percent of its steel, with half of it coming from the world's largest producer and exporter, China.

Domestic demand for steel will be sustained over the next few years thanks to the Build, Build, Build infrastructure program signed by President Rodrigo Duterte, in which the country intends to build more roads, bridges, railways and airports and modernize existing ones.

“(Steel demand) will track GDP growth,” said Cola, who is also vice president of Steel Asia Manufacturing Corp, one of the leading steel producers in the Philippines.

The government plans 6-7 percent of GDP this year.

Chinese steel shipments to the Philippines last year accounted for 7 percent of total steel exports of 66.9 million tonnes. According to the US Department of Commerce, about a third of China's steel exports go to Southeast Asia.

The country's heavy dependence on steel imports will drop significantly if the Philippines' first integrated steel complex - a $ 4.4 billion project run by China's second largest steel producer, HBIS Group and three others, including Steel Asia - begins production.

However, this project in the southern Philippines, with a planned capacity of 8 million tonnes per year, is still in the feasibility stage and there is no specific timeline for completion yet, he said.

HBIS, based in China's largest steel province, Hebei, has been forced to seek overseas opportunities to increase production as the Chinese government seeks to reduce the country's overcapacity.

As demand for steel has increased, the Philippines has seen an influx of induction furnaces, which were banned in China but made their way to parts of Southeast Asia, hitting domestic steel producers and causing safety and environmental concerns.