ASEAN is one of the fastest-growing emerging markets in the world, especially for the iron and steel industry. In the coming years, the industry is poised to grow further. Some of the biggest steel expansion projects have been lined up in these countries with the aim to meet the demand and needs of both domestic and overseas markets.
Let’s take a quick look at the upcoming steel expansion plans and projects in the major ASEAN countries mainly Vietnam, Indonesia, Philippines, Malaysia and Myanmar, as per the recent report released by SEAISI.
Vietnam
Vietnam is one of the fastest developing countries in the iron and steel sector with Hoa Phat and Formosa Ha Tinh as the major players.
- Hoa Phat Group is currently operating 3 blast furnaces – No.1 and No.2 with a capacity of 1 mn t each, for long products and No.3 for flat products (HRC). Another blast furnace is planned to be fired this year, adding another 1 mn t to its flat steel production capacity.
- Formoso Ha Tinh is currently operating 2 blast furnaces with an annual capacity of 7.5 mn t to produce about 6 mn t of flat and about 1.5 mn t of long products. It has an initial plan for 2 expansions of which each phase will increase the capacity by 7.5 mn t.
Indonesia
The country’s major steel players are gradually increasing their steel capacities. Majority of them have started expanding after entering into joint-ventures with major Chinese and South Korean steel companies.
- The second phase expansion plan of the joint venture between Indonesian PT Krakatau Steel and South Korean POSCO is expected to begin by CY ’25 for 3 mn t capacity. The integrated steel facilities, which comprise a blast furnace, a sintering plant, a coke oven plant and a plate mill will bring a total annual capacity of 6 mn t. Krakatau Steel and Krakatau POSCO combined will reach a total capacity of 10 mn t of steel output by CY ’25 with the completion of the Cilegon Steel Cluster.
- PT Gunung Raja Paksi Steel, another Indonesian steel company will be commissioning a new blast furnace with a capacity of 1.5 mn t to produce slabs in West Java. The plant is expected to be commissioned in Q2 CY ‘21.
- Hebei Bishi Group, China has planned to construct an integrated steel mill of 3 mn t in CY ‘20-21 in Kendal, Central Java, Indonesia, followed by an expansion of another 3 mn t capacity in the future.
- PT Dexin Steel recently started a blast furnace of 3.5 mn t capacity in Morowali Industrial Park, Central Sulawesi, Indonesia. Phase 1 of the project focuses on the manufacturing of billets and wires. Further, the company plans to raise its capacity in 2 more phases – 2.5 mn t by Dec ‘22 and 14 mn t in the future. The total target capacity is 20 mn t.
Philippines
Philippines is another ASEAN country that has managed to attract investments from major Chinese companies to become one of the biggest steel-producing countries in the region.
- HBIS SteelAsia – A joint venture of Philippines’s SteelAsia Manufacturing Corporation and China’s HBIS Group, also had plans of setting up an 8 mn t steel plant for long products in Lemery, Batangas in two phases of development by CY ‘26. The project appears to be under review due to COVID-19.
Malaysia
With steel expansion projects being lined up by major Malaysian producers and some foreign investments, this ASEAN – 6 country is set to raise its steel capacity in the following years. China’s WenAn Iron and Steel is investing on setting up an integrated steel plant of 10 mn t capacity for long and flat products. The phase for 5 mn t capacity was under discussion but due to pandemic, the project has been delayed.
Myanmar
Myanmar is gradually raising its steel capacities with investment from some renowned Chinese steel companies. Among them is Kunming Iron and Steel that plans to build an integrated steel mill in Myanmar of 4 mn t capacity, producing HRC, bars, rods and sections, in 2 phases of 2 mn t each. They are at the feasibility study stage at the moment. Kunming Iron and Steel in Feb ‘21 has been acquired by Baowu Steel, the world’s largest steel producer.
The upcoming projects will not only create job opportunities but also see a huge room for raw material or semi-finished steel imports to cater to the steel-making process. With the vaccination drive starting or about to start in most ASEAN countries, hopes abound for a recovery in CY ’21. With the expected boost in public construction activities and the eventual opening of borders, CY ’21 will be a much better year for most industries, including the steel industry.
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