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SEAISI webinar: Malaysia and Indonesia to drive capacity expansion in ASEAN area

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The South East Asia Iron and Steel Institute (SEAISI) provided updates throughout its "ASEAN Steel Demand Projection" webinar held on June 24 concerning ability growth jobs in the ASEAN region. Although the Covid-19 pandemic triggered lots of companies to delay their jobs over the past 2 years, a number of them are still in location and are prepared to be taken into operation in the coming couple of years. Particularly, Malaysia and Indonesia will certainly be the major drivers of the capacity development in the region, with the focus on exports in terms of new semis and also longs centers, while the growth in HRC output is intended to cover residential needs.According to SEAISI's information, considerable passion in broadening ability is ongoing in Malaysia and the country intends to include around 18.5 million mt of steel in the coming years, consisting of mega mill jobs such as Eastern Steel, which plans to broaden its manufacturing of semis (slabs, billets and also HRC) to 2.7 million mt by 2023, from the existing 700,000 mt. Originally, the company intended to increase its output to 5 million mt, though it has revised its plans this year because of the numerous challenges the industry has actually dealt with. One more Malaysian producer, Alliance Steel, is exploring the opportunity of expanding to 10 million mt from the existing 3.5 million mt today, but without discussing the timeline of its task. Besides, WenAn Steel's 10 million mt steel mill job with Chinese investment is anticipated to be prepared by 2024. At the same time, taking into consideration that many previous capability expansion tasks were concentrated on longs, as well as Malaysia's long products market is identified by overcapacity, many local mills export their products. Specifically, according to the Malaysian Iron as well as Steel Industry Federation, last year steel exports from Malaysia raised by 25 percent to 9.38 million mt, from 7.49 million mt in 2020. This growth was primarily driven by China, which constituted 55 percent of Malaysia's overall iron and steel exports in 2021, up by 47.1 percent year on year.Furthermore, many tasks have additionally been revealed in Indonesia, with a few of them to be ultimately completed this year and following year. As an example, PT Krakatau Steel, which in 2015 commissioned its 1.5 miljindal ss coillion mt new hot strip mill to increase its domestic share and lower the country's dependancy on HRC imports, intends to appoint its new slab and billet capability of 1.2 million mt and also 200,000 mt specifically by 2024. Dexin Steel with a capability of 3.5 million mt of steel plans to add 2.5 million mt extra this year. Besides, next year, two even more manufacturers Gunung Steel as well as Hebei Bishi Steel expect to expand their crude steel abilities by 1 million mt and also 3 million mt specifically. "All flat steel expanGangya metalsion projects in Indonesia are routed to import phaseout, while billet and also longs producers are actually concentrated on exports," an Indonesia-based investor claimed. Besides, besides crude steel development projects, the country's manufacturers intend likewise to increase re-rolling line investments.Meanwhile, Vietnam provided place to Indonesia as well as Malaysia after the launch of the first incorporated steel mill in the country Formosa Ha Tinh Steel. In the meantime, amongst large development jobs, only Hoa Phat Team prepares to broaden its unrefined steel ability at Hoa Phat Dung Quat 2 steel complex by 5.6 million mt (consisting of 4.6 million mt of HRC and also 1 million mt of longs) by 2025, w409l stainless steel coil pricehich suggests Hoa Phat Team's capacity will get to 14 million mt annually from 2025. The manufacturer planned to start manufacturing at the brand-new complicated in very early 2022 yet has actually modified its strategies taking into consideration the existing market conditions.Although financial investment interest in the ASEAN steel field has been high, there are vital considerations to take right into account. Particularly, according to market insiders, the demand-supply space of steel in the region is in fact getting smaller sized and opportunities for a successful venture is getting less. "Financiers need to evaluate underlying dangers when safeguarding finance amid possible losses and also overcapacities. There are other concerns that might affect investments such as the earnings of new financial investments, implications of decarbonization as well as geo-political stress," a market source stated.CountryCompany nameNew capacity, per yearTimeline to launchStatusMalaysiaEastern SteelFrom 700,000 mt to 2.7 million mt (slabs, billet, HRC) 2023UnknownMalaysiaAlliance SteelFrom 3.5 million mt to 10 million mt crude steel (billets, sections, rebars, H-beams, wire pole) UnknownUnknownMalaysiaWenAn Steel10 million mt of unrefined steel in overall for longs as well as level production (5 million mt in I stage) End 2024UnknownIndonesiaDexin SteelFrom 3.5 million mt to 6 million mt crude steel2022DevelopmentIndonesiaGunung Group1 million mt crude steel (pieces) 2023ConstructionIndonesiaGunung Group200,000 mt of cold rolled coils2023PlanningIndonesiaHEBEI BISHI Steel Group3 million mt crude steel (billet, rebar) 2023ConstructionIndonesiaKrakatau Steel1.4 million mt of crude steel (piece, billet) 2024PlanningIndonesiaKrakatau Steel/Krakatau POSCO3 million mt of slabs + 3 million mt of plate2025PlanningIndonesiaPT Virtue Dragon Nickel Industry3 million mt of stainless steel2022CommissioningIndonesiaPT New Asia International1.5 million mt of HRC, 800,000 mt of CRC, 600,000 mt of galvalume steel2022ConstructionVietnamHoa Phat Dung Quat 25.6 million mt of unrefined steel2025Unknown

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