Chinese investment could boost SE Asia's steel capacity by 50 mln T -industry head

MANILA, Nov 4 (Reuters) - Surging investments by Chinese
steelmakers in Southeast Asia could add more than 50 million
tonnes a year to the region's crude steel capacity, an industry
leader said on Monday.
Planned Chinese investments in mega steel projects in
Southeast Asia surged over the last two to three years,
particularly in Indonesia, Malaysia and the Philippines, said
Tan Ah Yong, the outgoing secretary general of South East Asia
Iron and Steel Institute (SEAISI).
"Chinese steel investments have been present in ASEAN for
some time now, but up until recently they were confined mainly
to the smaller players and the projects were relatively modest
in scale," Tan said in a farewell message to SEAISI members.
"Going forward, it is going to be an exciting and
challenging time for the iron and steel industry in ASEAN," he
said in the group's monthly publication released on Monday.
Tan, the group's secretary general since 2007, is stepping
down this month, although no specific date has been given.
Some of the China-funded mega steel projects, with
capacities of 3 million to 10 million tonnes a year, include
proposed investments in the Philippines by HBIS Group, China's
second-biggest steelmaker.
In December last year, HBIS signed a memorandum of
understanding with the Philippines' Steel Asia Manufacturing
Corp and state-owned Phividec Industrial Authority on a $4.4
billion project in the southern province of Misamis
Oriental. It will be the Philippines' first integrated steel complex,
with an output capacity of up to 8 million tonnes per year.
Construction and ramp-up for this project could be completed in
three to five years, but the final investment decision has yet
to be taken.
In September, HBIS also signed a memorandum of understanding
with SteelAsia on a $1 billion integrated iron and steel project
in Batangas province on the main Philippine island of Luzon.
Chinese company Panhua Group also plans to build an
integrated steel plant in Misamis Oriental province, according
to local media reports.
Steel demand in Southeast Asia is expected to grow 5.6% next
year, faster than growth this year forecast at 3.1%, supported
by infrastructure projects, according to the World Steel
Association.
In contrast, steel demand growth in China is seen slowing to
1% next year, down from projected growth of 7.8% this year.
Tan said, however, that the ongoing U.S.-China trade war,
uncertainties surrounding Brexit and the expected slowdown of
global economic growth could limit steel consumption growth in
Southeast Asia.