Asia Steel Forum 2019 : Key Takeaways

Slowing property sector has big impact on China’s fiscal revenue & infrastructure investment- Mr. Lu Ting (Chief Economist, Nomura Securities) shared that markets could turn more volatile in the next couple of months. He indicated that RMB could depreciate further against $. Slowing property sector has big impact on fiscal revenue & infrastructure investment. H2 2019 can be more difficult as exports & passenger car sales still face headwinds.

Japan’s ageing cities & infrastructure remain key challenges - Shigeru HAGIUDA from The Japan Iron and Steel Federation General Manager highlighted that main challenges for Japan’s domestic steel market are declining population resulting in shrink in population & automotive markets along with ageing cities & infrastructure.

Korean Steel Industry will continue to face challenges in 2020 - Mr. Heo Dae Young, Head of Research & Analysis Deptt (Korea Iron & Steel Association) highlighted that Korea’s steel industry is expected to remain under downside pressure due to slowing demand and worsening trade environment. Risks associated are – slowdown in construction orders, stricter regulation on the environment, and increase of imported goods, global protectionism & trade frictions.

Surge in investments with many integrated mega mills lined up in ASEAN- Mr Tan Ah Yong / South East Asia Iron and Steel Institute (SEAISI) Secretary General shared that ASEAN -6 total steel demand is expected to increase by 4-5% in 2019 to 83 MnT. Many huge integrated steel mills are starting up in Malaysia, Indonesia, Philippines & Vietnam with most of the investors being China steel mills. Few of major expansion projects coming up are Eastern Steel, Alliance Steel, PT Krakatau Steel, PT Gunung Group, Dexin Steel, Hoa Phat Group etc.

India’s changing potential - Mr Shinpei Asada from Metal One Cooperation shared that considering India’s increasing spending power, car demand & production is likely to go up. Due to this, the consumption of flat steel & high grade steel will increase in future. Also growth in FDI, e-commerce & IT industries are expected to keep demand strong.

Steel demand forecasts for Asian countries - Dr. Yoo SeungLok from POSCO Research Institute shared that Korean companies are reinforcing strategies to seize new market. Korea steel demand for ship breaking shrinks sharply but auto sector increases. Demand for construction steel to keep its levels but home appliance to reduce.

China’s investment in real estate is still strong in 2019 - Ms Amy Ren General Manager of Steel Department, Mysteel highlighted that the investment in the steel – real estate is still strong. The demand for the steel in capital construction has increased but growth of steel used in household appliance & machinery will gradually slow down. The market enters the seasonal stage of the inventory accumulation & overall inventory has increased by nearly 4 MnT compared with same time period last year.

2020 Korean Steel price forecast - Kim HongSik, Steel&Steel Vice President shared that long products prices will remain in its current state until Q1 2020 however annual total is expected to fall from this year. Flat products are similar to these years. Also scrap purchases price are coming down. However govt. spending on infrastructure investment may be a positive factor for demand.

India’s crude steel output may increase by 6% in 2019 – Ms Nishtha Mukerjee, Head of Research from SteelMint, India shared that India’s crude steel production is expected to increase by 6% to 112.5 MnT in 2019 and further to 119 MnT in 2020. Govt plans on infrastructure, construction & railways are expected to keep Indian steel demand supported in long run but high steel inventories, sluggish domestic market, liquidity issues & falling domestic prices have kept market sentiments negative so far this year.