The Southeast Asian Iron and Steel Institute (SEAISI) projects that steel demand in Southeast Asia will rise by 3.7% year-on-year in 2024, reaching 76.5 million tons, according to Argus Media. Despite this growth, the outlook remains lower than earlier expectations due to ongoing global inflationary pressures, price fluctuations, and weakening demand in key markets such as China.

At a specialized industry conference, SEAISI highlighted that steel demand in the six major ASEAN nations (ASEAN-6) declined by 1.9% in 2023, totaling 73.5 million tons. Steel production also fell by 2.1% to 49.4 million tons, while net steel imports dropped by 1.3% to 24.3 million tons.

Factors Behind the Decline in Steel Demand

Several key challenges impacted Southeast Asia’s steel industry last year:

• Lower External Demand: A global economic slowdown reduced exports.
• High Inflation & Interest Rates: Rising costs affected construction and industrial output.
• Tightening Financial Markets: Limited access to capital slowed down infrastructure projects.
• Construction Sector Slump: Many steel mills liquidated inventories due to weak demand.

Malaysia, the Philippines, and Vietnam saw significant steel demand declines of 14%, 7.5%, and 4.8%, respectively. Meanwhile, Singapore and Indonesia managed to experience growth in steel consumption.

Outlook for Steel Demand in 2024

Despite past setbacks, SEAISI expects a rebound in steel demand in 2024, driven by:

• Economic Growth Initiatives – ASEAN-6 governments remain optimistic about achieving their GDP targets.
• Infrastructure & Construction Projects – Increased public and private sector investments will boost steel consumption.
• Tourism Recovery – A revitalized travel industry will fuel economic expansion.
• Stable Inflation Rates – Easing inflation is expected to enhance consumer and business confidence.

Challenges Facing Southeast Asia’s Steel Industry

While growth is anticipated, several risks persist:

• Geopolitical Uncertainty – Trade tensions and supply chain disruptions could affect raw material availability.
• Weaker ASEAN Currencies – Currency fluctuations may increase the cost of steel imports.
• Sluggish Global Growth – Economic slowdowns outside Southeast Asia could impact exports.
• Volatile Commodity Prices – Fluctuating iron ore and energy prices remain a challenge.
• Extreme Weather Events – Climate-related disruptions could affect production and logistics.

The Need for Industry Support

As reported by Midwest Steel, the ASEAN steel industry requires greater government support, investment, and advanced technology to remain competitive, especially as the global push for decarbonization intensifies. The region already faces overcapacity issues, which may worsen without strategic intervention.

With the right policies, financing, and technological advancements, Southeast Asia’s steel sector can navigate these challenges and sustain its long-term growth.

For more industry insights and updates, visit Midwest Steel.