Southeast Asia’s crude steel production capacity is expected to increase to 164.8 million tonnes (mnt) by 2030 which will create a problem of overcapacity, As Yeo Wi Jin, secretary general of the Southeast Asian Steel Association (SEAISI), said while speaking at the annual conference in Kuala Lumpur, Malaysia.
In Southeast Asia, 2.2 mnt of electric furnaces will be installed, which will further lead to increase in capacity by 90.8 mnt. The major reason for the overcapacity is the rapid expansion in Indonesia, Vietnam and Malaysia. However, large blast furnaces have been temporarily shut down in Vietnam.
The current steel demand in Malaysia is around 10 mnt, while production is 16 mnt and is expected to rise to 46 mnt in the future, as the country is still allowed to invest in new capacity expansions. The expansion plans include exports to China. But the real estate market in China is deteriorating putting a question mark on Malaysia’s exports at this juncture.
Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.
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