China’s steel position in the southeast Asian market is declining

A quarter of China’s steel exports to southeast Asia last year fell 45 per cent from the year before, according to figures tracked by MEPS, a British steel consultancy. In the first quarter of 2018 it fell by a third. It can be said that China’s steel market in southeast Asia is declining.

In recent years, southeast Asia has been the main region for China’s steel exports. In China’s steel exports in the top 10 countries, besides long dominated the top of South Korea, Vietnam, the Philippines, Thailand, Indonesia, Malaysia and other southeast Asian countries in this column, myanmar, Singapore, etc. Also the top. At the same time, the steel industry in our country’s strategic layout in this aspect to consider, for example, treasure, zhanjiang project, professional steel 5.7 million tons of steel production transfer project, sheng bao steel manufacturing base for new generation iron and steel projects are considered in this respect.

The size of the southeast Asian market is huge. According to the world steel association statistics show that in 2017, the net imports of steel 12.6 million tons, Thailand Vietnam net imports of steel 12.3 million tons, Indonesia net imports of steel 8.7 million tons, net imports 7.3 million tons of steel in the Philippines, Malaysia, net imports of steel 6 million tons, the above five countries in southeast Asia steel net imports reached 46.9 million tons in 2017. In view of geographical and price advantages, Chinese steel used to be an important supplement for southeast Asian countries. Vietnam, for example, imports more than 70 per cent of its steel at peak times from China.

But in recent years, especially since 2017, the pace of China’s steel exports to southeast Asia has slowed. According to statistics, China’s exports of steel to asean, South Korea and the Middle East totaled 43,769,300 tons in 2017, down 25.337 million tons from a year earlier and down 36.65 percent. Among them, South Korea and southeast Asia market decline is particularly obvious. In 2017, China exported a total of 29.1263 million tons of steel to South Korea, Vietnam, the Philippines, Thailand and Indonesia, decreasing by 1.543 million tons and 34.63 percent year-on-year.

In addition, southeast Asia market regional production capacity release speed up, market supply and demand have a subtle change, the demand for steel imports reduced. For example, the successful ignition of no. 2 blast furnace at the taisu hejing iron and steel plant in Vietnam marked the successful completion of two 4350 cubic meters of blast furnace projects at the plant. The final planned capacity of the project is 21.85 million tons, and the first phase of the project is 7.1 million tons. Data show that the first four months of this year, Vietnam exports steel 1.9 million tons, exports of $1.41 billion, exports and exports year-on-year growth of 43.6%, 61.7% respectively, and export growth, the largest is the other asean countries. At the same time, the production capacity of Japanese and Korean enterprises in southeast Asia has been further expanded, especially in some construction steel and plate projects, which have reduced the dependence of the southeast Asian market on Chinese steel. In addition, India, Russia and other countries to southeast Asia market steel exports are also increasing. Total exports of finished steel in India increased 16.7 per cent to 9621, 000 tonnes in the 2017-2018 fiscal year (April 2017 to March 2018), according to PTI. In addition to the U.S. market, these steel more southeast Asia market, India also replaced Japan as the world’s second-largest steel exporter. After that, the collision between China and India in the southeast Asian market will be more intense. As a result, China’s steel exports to southeast Asia market share may be gradually compressed.

Overall, in the future, in the southeast Asian market, China’s steel “one big” situation will never come back. If China’s steel enterprises do not adapt to the market changes early, in the increasingly heated trade protection measures will be more passive. In southeast Asia, China’s steel mills still retains the patency of the marketing channel, China’s iron and steel products is also very competitive advantage, should strengthen the propaganda, the understanding of competitors, continue to consolidate the southeast Asia market. In addition, Chinese steel enterprises may consider processing primary products into parts for export. According to the author, a section steel production enterprise in tangshan area, which used to export section steel to southeast Asian countries, now processes the section steel locally and sells parts for forklift truck to local manufacturing enterprises. Its sales have increased from a few thousand tons per month to at least 10,000 tons per month now. In a word, adopting a more flexible export strategy is the inevitable choice for Chinese steel enterprises to tide over the difficulties. Therefore, Chinese steel enterprises should have adequate psychological preparation.

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Post time: Jul-11-2018
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