AMM.com Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5


Southeast Asia imports of Japanese steel rise

Keywords: Tags  Japanese steel, steel exports, Southeast Asia imports, Chow Chong Long, South East Asia Iron and Steel Institute, Credit Suisse Group


SINGAPORE — The weaker yen has led Southeast Asia to import more Japanese steel products, particularly higher-grade product not produced by the region, according to Chow Chong Long, chairman of the South East Asia Iron and Steel Institute.

Chow didn’t provide any figures, but pointed out that the weaker yen caused the pricing gap between Japanese and Chinese steel products in the import market to narrow significantly, to $30 per tonne from about $60 to $80 per tonne previously.

Imports from Japan consist mostly of high-end steel that Southeast Asia needs, he said. Chinese imports, meanwhile, consist mostly of basic commercial grades, which are seen to be competing with mills in the region for the same market and resulting in affected countries coming up with various measures to protect their domestic industry.

Southeast Asia is a major steel-importing region in Asia, and Japan has traditionally been the largest exporter to the region in terms of its share, even before the sharp devaluation of the Japanese currency to spur growth. Japanese products account for more than 20 percent of the region’s imports.

Southeast Asia is poised to become an increasingly important export destination due to the presence of Japanese automakers and consumer electronics companies, according to a report published earlier this month by Credit Suisse Group AG.

As a result of the weakening yen, the much-improved profitability for Japanese exporters means mills there will become more aggressive in selling to the overseas market, the report said.

The incremental steel supply from Japan—11 million to 22 million tonnes, based on a 90- to 98-percent capacity utilization rate—might look small vs. the total Asian market. However, it is equal to 11 to 23 percent of intra-Asia steel trade, 22 to 45 percent of north Asian exports to south Asia, and 50 to 100 percent of the Asian auto sheet segment, the bank’s analysts said.

While exports to south Asia are where the competition is set to intensify, the impact will feed through to the rest of the Asian steel market in the end, the bank added. 

A version of this article was first published by AMM sister publication Steel First.


Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.



Latest Pricing Trends