Demand for rolled steel will grow despite lower consumption in China

Steel consumption in Southeast Asia, South Korea and Japan is expected to recover from 2021, Southeast Asia Iron and Steel Institute (SEAISI) and JFE Steel said at the Asia Steel Markets 2021 conference on Wednesday.

The China Metallurgy Planning and Research Institute (MPI), meanwhile, noted that China faces a medium- to long-term decline in steel consumption.

Yeo Wee Jin, Secretary General of SEAISI, said steel consumption in ASEAN-6 countries - Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam - is estimated to have fallen 12.5% ​​year on year to 70 million tonnes in 2020. ... This year it may reach 72-75 million tons, which is 2.9-7% more than a year earlier.

Mike Fujisawa, in charge of overseas business planning at the JFE, meanwhile, expected steel demand in ASEAN-5 countries to reach 71.3 million tonnes in 2021. Both Yeoh and Fujisawa concluded that demand in the region could not reach pre-pandemic levels this year.

According to MPI President Li Xinchuan, China will face a slow decline in steel consumption in the medium to long term. By 2035, China will enter a late industrial period, which will lead to a reduction in steel consumption as the country moves towards carbon neutrality. However, continued urbanization will slow this decline.

“The low-carbon concept will define the quality development model for China's steel industry,” added Li. Digitalization, technological revolution and green collaboration are three trends that this implies. Lee noted that financial factors, tax incentives, market-based carbon trading, international cooperation and comprehensive standards will contribute to lower-carbon development in the industry.

In terms of imports and exports, different trends were observed in the countries last year. ASEAN-6 countries exported 19.1 million tons in 2020, up 23% from a year earlier, but their imports fell 18.2% to 41.9 million tons. In contrast, steel imports to China increased by 64.4% YoY to 20.233 Mt, while exports totaled 53.671 Mt, down 16.5%.