The document discusses the steel industry in Southeast Asia. It notes that at a 2015 conference, Southeast Asian countries raised concerns about surging steel imports from China, which have doubled in recent years. This has led to a loss of competitiveness for domestic steel industries. Though steel production is rising in Southeast Asia, it still falls short of demand, which is met through imports, especially from China, Korea, and Japan. There is increased competition among steelmakers from these countries to establish production facilities and expand their businesses in Southeast Asia.

1. Vol.01 January 2016 7978 Asian Steel Watch
The 2015 Southeast Asia Iron and Steel Institute
(SEAISI) Conference and Exhibition was held in
Manila, Philippines from May 25-28. At this an-
nual meeting, many Southeast Asian countries
raised concerns over surging Chinese steel im-
ports and the subsequent loss of competitiveness
of their steel industries. Amid an ongoing supply
glut in the global steel industry, Southeast Asia
has become a major destination for excess steel
products from China. In 2014, China’s global
finished steel exports stood at about 93 million
tonnes, 26% (24 million tonnes) of which went to
six Southeast Asian countries. This is three times
higher than the 7.8 million tonnes (19% of total
exports) in 2010.
Despite a long-term
global recession, South-
east Asia is still regarded
as an attractive market
with high growth poten-
tial for major countries
and global companies.
The International Monetary Fund (IMF) pro-
jected in its World Economic Outlook, released
in October, 2015 that ASEAN-5—Indonesia,
Malaysia, Philippines, Thailand, and Singapore—
is expected to have average GDP growth of 4.9%
in 2015 and 5.1% in 2016, which would be much
higher than the global average of 3.1% in 2015
and 3.6% in 2016.
With the acceleration of quantitative econom-
ic growth, and the emergence of many Southeast
Asian countries as production hubs for major
steel-consuming industries, such as automobiles
and home appliances, steel demand is rising
steadily. According to the SEAISI, total steel de-
mand in six ASEAN member countries reached
approximately 66 million tonnes in 2014, and is
expected to surpass 80 million tonnes in 2020.
Anticipating rising steel demand in Southeast
Asia, Korean, Chinese, and Japanese steelmak-
ers are stepping up their move into Southeast
Asian markets. JFE Steel, NSSMC, Kobe Steel,
and other major steel companies of Japan, the
largest investor in Southeast Asia, have already
Southeast Asia—
a battlefield for
Korean, Chinese,
and Japanese
steelmakers
established production bases in Indonesia, Thai-
land, and other ASEAN countries, or are planning
to make new investments. In late 2013, Korea’s
POSCO began operating Krakatau POSCO, the
first integrated steelworks in Southeast Asia.
POSCO is currently operating production bases
and service centers in Malaysia, Vietnam, Myan-
mar, and Thailand. Other Korean steel companies
are seeking to expand their business in South-
east Asia by building production facilities: SeAH
Steel (steel pipe, Vietnam), Dongbu Steel (color-
coated steel sheet, Thailand), and Kiswire (wire
rope, Malaysia). In the past, China focused its
investment in Southeast Asia on mining and en-
ergy, but these days China is making inroads into
Southeast Asian markets through the establish-
ment of steelworks.
Investment in steel production continues to
rise in Southeast Asia. However, production with-
in the region still falls short of demand, which is
met mostly through imports. In 2014, total steel
production in six ASEAN countries reached 28
million tonnes, while steel imports surpassed
46 million tonnes, satisfying about 70% of total
demand of 66 million tonnes <Table 1>. Imports
from Korea, China, and Japan accounted for
about 80% of steel imports in 2014. In particular,
these countries’ dependence on price-competitive
Increased Trade Barriers
in Southeast Asia
Following a Rapid Rise in Steel Imports
Jisun Kim
Senior Principal Researcher
POSCO Research Institute
jisunkim@posri.re.kr
2009 2010 2011 2012 2013 2014
Indonesia 5,092 5,212 5,448 5,418 5,116 6,475
Malaysia 5,103 4,967 5,111 4,954 4,980 4,759
Philippines 1,893 2,133 2,420 2,653 3,020 3,273
Singapore 689 716 750 705 429 540
Thailand 6,955 7,483 6,936 6,721 6,845 6,819
Vietnam 4,723 5,659 5,470 5,049 5,123 5,657
Total 24,454 26,169 26,135 25,499 25,513 27,522
Table 1. Overview of Steel Market in Six Southeast Asian Countries
1. Production (Hot-rolled Steel Products)
2009 2010 2011 2012 2013 2014
Indonesia 3,380 4,908 6,686 7,932 8,190 7,401
Malaysia 3,611 4,818 4,684 5,416 6,269 7,036
Philippines 1,615 1,971 2,699 3,355 3,685 4,052
Singapore 3,666 3,994 5,214 5,204 5,968 5,188
Thailand 5,043 8,008 8,821 10,813 11,962 11,645
Vietnam 7,035 6,728 5,981 7,568 8,791 11,055
Total 24,349 30,426 34,085 40,288 44,865 46,378
2. Imports1)
2009 2010 2011 2012 2013 2014
Indonesia 1,052 1,169 1,182 850 614 978
Malaysia 2,069 1,470 1,558 1,448 1,200 1,716
Philippines 74 104 11 - - -
Singapore 1,551 2,032 2,115 2,083 2,121 1,895
Thailand 1,247 1,407 1,203 1,153 1,203 1,141
Vietnam 471 1,281 1,754 1,661 2,145 2,271
Total 6,463 7,464 7,823 7,196 7,283 8,001
3. Exports
2009 2010 2011 2012 2013 2014
Indonesia 7,420 8,950 10,952 12,500 12,692 12,898
Malaysia 6,645 8,314 8,238 8,922 10,049 10,079
Philippines 3,434 3,999 5,108 6,008 6,705 7,325
Singapore 2,804 2,678 3,849 3,826 4,276 3,833
Thailand 10,750 14,085 14,554 16,380 17,604 17,323
Vietnam 10,922 10,572 9,698 10,956 11,769 14,441
Total 41,976 48,598 52,398 58,592 63,094 65,899
4. Apparent Steel Consumption
2009 2010 2011 2012 2013 2014
Production 24,454 26,169 26,135 25,499 25,513 27,522
Imports1) 24,349 30,426 34,085 40,288 44,865 46,378
Exports 6,463 7,464 7,823 7,196 7,283 8,001
Apparent Steel Consumption 41,976 48,598 52,398 58,592 63,094 65,899
5. Summary
Note: 1) Imports do not include semi-finished products
Source: SEAISI Steel Statistical Yearbook
(1,000 tonnes) (1,000 tonnes)
(1,000 tonnes) (1,000 tonnes)
Featured Articles Increased Trade Barriers in Southeast Asia Following a Rapid Rise in Steel Imports

2. Vol.01 January 2016 7978 Asian Steel Watch
The 2015 Southeast Asia Iron and Steel Institute
(SEAISI) Conference and Exhibition was held in
Manila, Philippines from May 25-28. At this an-
nual meeting, many Southeast Asian countries
raised concerns over surging Chinese steel im-
ports and the subsequent loss of competitiveness
of their steel industries. Amid an ongoing supply
glut in the global steel industry, Southeast Asia
has become a major destination for excess steel
products from China. In 2014, China’s global
finished steel exports stood at about 93 million
tonnes, 26% (24 million tonnes) of which went to
six Southeast Asian countries. This is three times
higher than the 7.8 million tonnes (19% of total
exports) in 2010.
Despite a long-term
global recession, South-
east Asia is still regarded
as an attractive market
with high growth poten-
tial for major countries
and global companies.
The International Monetary Fund (IMF) pro-
jected in its World Economic Outlook, released
in October, 2015 that ASEAN-5—Indonesia,
Malaysia, Philippines, Thailand, and Singapore—
is expected to have average GDP growth of 4.9%
in 2015 and 5.1% in 2016, which would be much
higher than the global average of 3.1% in 2015
and 3.6% in 2016.
With the acceleration of quantitative econom-
ic growth, and the emergence of many Southeast
Asian countries as production hubs for major
steel-consuming industries, such as automobiles
and home appliances, steel demand is rising
steadily. According to the SEAISI, total steel de-
mand in six ASEAN member countries reached
approximately 66 million tonnes in 2014, and is
expected to surpass 80 million tonnes in 2020.
Anticipating rising steel demand in Southeast
Asia, Korean, Chinese, and Japanese steelmak-
ers are stepping up their move into Southeast
Asian markets. JFE Steel, NSSMC, Kobe Steel,
and other major steel companies of Japan, the
largest investor in Southeast Asia, have already
Southeast Asia—
a battlefield for
Korean, Chinese,
and Japanese
steelmakers
established production bases in Indonesia, Thai-
land, and other ASEAN countries, or are planning
to make new investments. In late 2013, Korea’s
POSCO began operating Krakatau POSCO, the
first integrated steelworks in Southeast Asia.
POSCO is currently operating production bases
and service centers in Malaysia, Vietnam, Myan-
mar, and Thailand. Other Korean steel companies
are seeking to expand their business in South-
east Asia by building production facilities: SeAH
Steel (steel pipe, Vietnam), Dongbu Steel (color-
coated steel sheet, Thailand), and Kiswire (wire
rope, Malaysia). In the past, China focused its
investment in Southeast Asia on mining and en-
ergy, but these days China is making inroads into
Southeast Asian markets through the establish-
ment of steelworks.
Investment in steel production continues to
rise in Southeast Asia. However, production with-
in the region still falls short of demand, which is
met mostly through imports. In 2014, total steel
production in six ASEAN countries reached 28
million tonnes, while steel imports surpassed
46 million tonnes, satisfying about 70% of total
demand of 66 million tonnes <Table 1>. Imports
from Korea, China, and Japan accounted for
about 80% of steel imports in 2014. In particular,
these countries’ dependence on price-competitive
Increased Trade Barriers
in Southeast Asia
Following a Rapid Rise in Steel Imports
Jisun Kim
Senior Principal Researcher
POSCO Research Institute
jisunkim@posri.re.kr
2009 2010 2011 2012 2013 2014
Indonesia 5,092 5,212 5,448 5,418 5,116 6,475
Malaysia 5,103 4,967 5,111 4,954 4,980 4,759
Philippines 1,893 2,133 2,420 2,653 3,020 3,273
Singapore 689 716 750 705 429 540
Thailand 6,955 7,483 6,936 6,721 6,845 6,819
Vietnam 4,723 5,659 5,470 5,049 5,123 5,657
Total 24,454 26,169 26,135 25,499 25,513 27,522
Table 1. Overview of Steel Market in Six Southeast Asian Countries
1. Production (Hot-rolled Steel Products)
2009 2010 2011 2012 2013 2014
Indonesia 3,380 4,908 6,686 7,932 8,190 7,401
Malaysia 3,611 4,818 4,684 5,416 6,269 7,036
Philippines 1,615 1,971 2,699 3,355 3,685 4,052
Singapore 3,666 3,994 5,214 5,204 5,968 5,188
Thailand 5,043 8,008 8,821 10,813 11,962 11,645
Vietnam 7,035 6,728 5,981 7,568 8,791 11,055
Total 24,349 30,426 34,085 40,288 44,865 46,378
2. Imports1)
2009 2010 2011 2012 2013 2014
Indonesia 1,052 1,169 1,182 850 614 978
Malaysia 2,069 1,470 1,558 1,448 1,200 1,716
Philippines 74 104 11 - - -
Singapore 1,551 2,032 2,115 2,083 2,121 1,895
Thailand 1,247 1,407 1,203 1,153 1,203 1,141
Vietnam 471 1,281 1,754 1,661 2,145 2,271
Total 6,463 7,464 7,823 7,196 7,283 8,001
3. Exports
2009 2010 2011 2012 2013 2014
Indonesia 7,420 8,950 10,952 12,500 12,692 12,898
Malaysia 6,645 8,314 8,238 8,922 10,049 10,079
Philippines 3,434 3,999 5,108 6,008 6,705 7,325
Singapore 2,804 2,678 3,849 3,826 4,276 3,833
Thailand 10,750 14,085 14,554 16,380 17,604 17,323
Vietnam 10,922 10,572 9,698 10,956 11,769 14,441
Total 41,976 48,598 52,398 58,592 63,094 65,899
4. Apparent Steel Consumption
2009 2010 2011 2012 2013 2014
Production 24,454 26,169 26,135 25,499 25,513 27,522
Imports1) 24,349 30,426 34,085 40,288 44,865 46,378
Exports 6,463 7,464 7,823 7,196 7,283 8,001
Apparent Steel Consumption 41,976 48,598 52,398 58,592 63,094 65,899
5. Summary
Note: 1) Imports do not include semi-finished products
Source: SEAISI Steel Statistical Yearbook
(1,000 tonnes) (1,000 tonnes)
(1,000 tonnes) (1,000 tonnes)
Featured Articles Increased Trade Barriers in Southeast Asia Following a Rapid Rise in Steel Imports

3. Vol.01 January 2016 8180 Asian Steel Watch
Chinese imports doubled over the last
five years, to 42% in 2014 <Table 2>.
The export price for Chinese hot-rolled
coil was USD 429 per tonne in early
2015, but declined to about USD 270
per tonne in October 20151. Japan’s
export price for hot-rolled coil also fell
during this period2, from USD 480 per tonne to
USD 307 per tonne. Chinese steel products main-
tain high price competitiveness. However, com-
petition in Southeast Asia’s steel markets among
Korea, China, and Japan will become fiercer, due
largely to continued oversupply, falling raw mate-
rial prices, and the weak yen.
With steel demand
mostly satisfied by im-
ports, Southeast Asian
countries are trying to
nurture their own steel
industries and strength-
en protectionist policies to reduce high depen-
dence on imports. In February 2014, Indonesia
enacted the “New Trade Law,” which enables the
government to restrict the volume and price of
imports and exports of certain goods. Southeast
Asian countries have revamped trade policies
to protect their industries. Moreover, they have
raised trade barriers lest their steel products lose
competitiveness to rising Chinese steel imports.
Steel protectionism in Southeast Asia is
characterized by the implementation of various
protection measures, such as traditional trade
protection (tariffs, anti-dumping, and safe-
guards), technical barriers to trade (TBTs; import
approvals and permissions), and non-tariff bar-
riers to trade (NTBs; “Buy National”). Developed
countries have relatively low bound tariffs under
the WTO commitments, meaning tariff barrier
utilization is very low. On the other hand, devel-
oping countries have a wide gap between bound
and applied tariffs. For this reason, Indonesia,
Malaysia, and other Southeast Asian countries
are moving to increase tariffs on steel imports.
In addition, Southeast Asian countries are
actively utilizing trade remedies: for example,
imposing anti-dumping (AD) duties and taking
safeguard actions. WTO statistics for the last
twenty years show that the number of AD cases
filed by six Southeast Asian countries in the basic
metal sector was more than twice the number
of AD cases filed against them in the last two
years (2013-2014), a marked increase from the
period between 1995 and 2012. In particular,
Malaysia and Vietnam imposed no AD duties on
steel imports from 1995 to 2012, but from 2013
to 2014, they actively used AD measures, as did
Indonesia and Thailand <See Table 3>. Indonesia
has imposed AD duties on imported hot-rolled
coil (HRC), cold-rolled coil (CRC), and tin plates,
while Thailand has imposed AD duties on stain-
less steel plates and galvanized sheets, and Ma-
laysia on tin plates and wire rods. These countries
have launched AD investigations into various
steel imports. From January 1995 to April 20153,
thirty safeguard actions were taken on steel im-
ports and most were taken after 2011. Indonesia
has actively sought safeguard measures. The mea-
sures are currently in place on imports of flat-
rolled product of iron or non-alloy, seamless pipe
casing and tubing, and I and H sections of other
alloy steel.
In addition to traditional trade protection
measures, Southeast Asia has tightened TBTs
for steel imports, including import approvals
and permissions. Indonesia’s Standard National
Indonesia (SNI) has added HRC, CRC, long
products, and galvanized steel to the list of steel
products requiring certificates of approval, and
continues to expand the list. Thailand has raised
trade barriers by making the approval process
more complicated, requiring quality approvals
from the Thailand Industrial Standard Institute
(TISI) for certain steel imports. In Ma-
laysia, companies wishing to import
steel and certain other products must
acquire certificates of approval. For
some specific steel products, Malaysia
requires the importer to obtain certifi-
cates of approval from the Ministry of Trade and
Industry for each shipment, even if the importer
has already contracted with a Malaysian com-
pany. Vietnam has required automatic import
licenses for all steel products since August 2012.
The “Buy National” policy, an NTB that has
spread rapidly around the world, is also widely
used in major Southeast Asian countries. In 2010,
Indonesia amended the National Procurement
Law, which mandates that government-procured
products contain at least 40% domestic raw ma-
terials, and offers preferential pricing to suppli-
ers. In Malaysia and Brunei, special benefits are
given to government bodies for the procurement
of local goods and services.
With an increasing num-
ber of trade protection
measures in Southeast
Asia, ten countries es-
tablished the ASEAN
Economic Community
(AEC) at the end of December 2015. The AEC, the
Growing steel
protectionism
in Southeast Asia
1
Export price for hot-rolled coil,
FOB main port (including Chinese
value added tax). Data from Metal
Bulletin (as of Oct. 31, 2015).
2
Export price for hot-rolled coil,
FOB. Data from CRU
(as of Oct. 31, 2015)
3
Data for the period between
January 1, 1995 and April 30,
2015. For details, see WTO
safeguard website (https://www.
wto.org/english/tratop_e/safeg_
e/safeg_e.htm, accessed at June
30, 2015)
2009 2010 2011 2012 2013 2014
Total Imports (Mt) 33.0 39.4 42.1 50.1 55.1 58.2
Semi-finished steel 9.6 9.6 8.1 9.8 10.2 10.9
Sections, bars & wire rods 4.7 5.9 6.9 8.4 11.2 12.4
Hot-rolled sheets & strips 9.6 11.4 13.9 16.5 17.8 18.4
Cold-rolled products 3.7 4.7 4.9 3.7 3.7 3.6
Coated sheets & strips 3.0 4.8 5.1 5.2 5.5 5.4
Others 2.4 3.1 3.4 6.4 6.8 7.4
Breakdown by country (Mt)
Indonesia 5.5 7.3 9.2 11.7 12.5 12.6
Malaysia 3.7 5.0 4.8 5.6 6.4 7.5
Philippines 2.8 3.1 3.8 4.6 5.4 6.1
Singapore 3.7 4.0 5.2 5.2 6.0 5.3
Thailand 8.9 12.0 12.2 14.8 15.6 14.7
Vietnam 8.5 8.0 6.8 8.0 9.2 11.9
Main sources of import (%)
Japan 22 27 26 25 25 23
China 12 19 20 26 30 42
Korea 11 12 16 15 13 12
Russia 13 10 7 8 6 4
Taiwan 10 8 8 7 7 7
India 2 1 1 1 3 1
Intra-ASEAN 10 8 8 6 5 5
Table 2. Steel Product Imports of Six Southeast Asian
Countries
Source: SEAISI Steel Statistical Yearbook
Featured Articles Increased Trade Barriers in Southeast Asia Following a Rapid Rise in Steel Imports
Reporting Country Indonesia Malaysia Philippines Singapore Thailand Vietnam Total
1995-2012 21 0 3 2 26 0 52
2013-2014 11 7 0 0 11 4 33
Exporting Country Indonesia Malaysia Philippines Singapore Thailand Vietnam Total
1995-2012 12 18 1 0 21 2 54
2013-2014 4 2 0 1 3 6 16
Source: WTO Website
Table 3. Anti-dumping Measures in Base Metal Sector by Six Southeast Asia Countries
Strategic approach
to investment
and export

4. Vol.01 January 2016 8180 Asian Steel Watch
Chinese imports doubled over the last
five years, to 42% in 2014 <Table 2>.
The export price for Chinese hot-rolled
coil was USD 429 per tonne in early
2015, but declined to about USD 270
per tonne in October 20151. Japan’s
export price for hot-rolled coil also fell
during this period2, from USD 480 per tonne to
USD 307 per tonne. Chinese steel products main-
tain high price competitiveness. However, com-
petition in Southeast Asia’s steel markets among
Korea, China, and Japan will become fiercer, due
largely to continued oversupply, falling raw mate-
rial prices, and the weak yen.
With steel demand
mostly satisfied by im-
ports, Southeast Asian
countries are trying to
nurture their own steel
industries and strength-
en protectionist policies to reduce high depen-
dence on imports. In February 2014, Indonesia
enacted the “New Trade Law,” which enables the
government to restrict the volume and price of
imports and exports of certain goods. Southeast
Asian countries have revamped trade policies
to protect their industries. Moreover, they have
raised trade barriers lest their steel products lose
competitiveness to rising Chinese steel imports.
Steel protectionism in Southeast Asia is
characterized by the implementation of various
protection measures, such as traditional trade
protection (tariffs, anti-dumping, and safe-
guards), technical barriers to trade (TBTs; import
approvals and permissions), and non-tariff bar-
riers to trade (NTBs; “Buy National”). Developed
countries have relatively low bound tariffs under
the WTO commitments, meaning tariff barrier
utilization is very low. On the other hand, devel-
oping countries have a wide gap between bound
and applied tariffs. For this reason, Indonesia,
Malaysia, and other Southeast Asian countries
are moving to increase tariffs on steel imports.
In addition, Southeast Asian countries are
actively utilizing trade remedies: for example,
imposing anti-dumping (AD) duties and taking
safeguard actions. WTO statistics for the last
twenty years show that the number of AD cases
filed by six Southeast Asian countries in the basic
metal sector was more than twice the number
of AD cases filed against them in the last two
years (2013-2014), a marked increase from the
period between 1995 and 2012. In particular,
Malaysia and Vietnam imposed no AD duties on
steel imports from 1995 to 2012, but from 2013
to 2014, they actively used AD measures, as did
Indonesia and Thailand <See Table 3>. Indonesia
has imposed AD duties on imported hot-rolled
coil (HRC), cold-rolled coil (CRC), and tin plates,
while Thailand has imposed AD duties on stain-
less steel plates and galvanized sheets, and Ma-
laysia on tin plates and wire rods. These countries
have launched AD investigations into various
steel imports. From January 1995 to April 20153,
thirty safeguard actions were taken on steel im-
ports and most were taken after 2011. Indonesia
has actively sought safeguard measures. The mea-
sures are currently in place on imports of flat-
rolled product of iron or non-alloy, seamless pipe
casing and tubing, and I and H sections of other
alloy steel.
In addition to traditional trade protection
measures, Southeast Asia has tightened TBTs
for steel imports, including import approvals
and permissions. Indonesia’s Standard National
Indonesia (SNI) has added HRC, CRC, long
products, and galvanized steel to the list of steel
products requiring certificates of approval, and
continues to expand the list. Thailand has raised
trade barriers by making the approval process
more complicated, requiring quality approvals
from the Thailand Industrial Standard Institute
(TISI) for certain steel imports. In Ma-
laysia, companies wishing to import
steel and certain other products must
acquire certificates of approval. For
some specific steel products, Malaysia
requires the importer to obtain certifi-
cates of approval from the Ministry of Trade and
Industry for each shipment, even if the importer
has already contracted with a Malaysian com-
pany. Vietnam has required automatic import
licenses for all steel products since August 2012.
The “Buy National” policy, an NTB that has
spread rapidly around the world, is also widely
used in major Southeast Asian countries. In 2010,
Indonesia amended the National Procurement
Law, which mandates that government-procured
products contain at least 40% domestic raw ma-
terials, and offers preferential pricing to suppli-
ers. In Malaysia and Brunei, special benefits are
given to government bodies for the procurement
of local goods and services.
With an increasing num-
ber of trade protection
measures in Southeast
Asia, ten countries es-
tablished the ASEAN
Economic Community
(AEC) at the end of December 2015. The AEC, the
Growing steel
protectionism
in Southeast Asia
1
Export price for hot-rolled coil,
FOB main port (including Chinese
value added tax). Data from Metal
Bulletin (as of Oct. 31, 2015).
2
Export price for hot-rolled coil,
FOB. Data from CRU
(as of Oct. 31, 2015)
3
Data for the period between
January 1, 1995 and April 30,
2015. For details, see WTO
safeguard website (https://www.
wto.org/english/tratop_e/safeg_
e/safeg_e.htm, accessed at June
30, 2015)
2009 2010 2011 2012 2013 2014
Total Imports (Mt) 33.0 39.4 42.1 50.1 55.1 58.2
Semi-finished steel 9.6 9.6 8.1 9.8 10.2 10.9
Sections, bars & wire rods 4.7 5.9 6.9 8.4 11.2 12.4
Hot-rolled sheets & strips 9.6 11.4 13.9 16.5 17.8 18.4
Cold-rolled products 3.7 4.7 4.9 3.7 3.7 3.6
Coated sheets & strips 3.0 4.8 5.1 5.2 5.5 5.4
Others 2.4 3.1 3.4 6.4 6.8 7.4
Breakdown by country (Mt)
Indonesia 5.5 7.3 9.2 11.7 12.5 12.6
Malaysia 3.7 5.0 4.8 5.6 6.4 7.5
Philippines 2.8 3.1 3.8 4.6 5.4 6.1
Singapore 3.7 4.0 5.2 5.2 6.0 5.3
Thailand 8.9 12.0 12.2 14.8 15.6 14.7
Vietnam 8.5 8.0 6.8 8.0 9.2 11.9
Main sources of import (%)
Japan 22 27 26 25 25 23
China 12 19 20 26 30 42
Korea 11 12 16 15 13 12
Russia 13 10 7 8 6 4
Taiwan 10 8 8 7 7 7
India 2 1 1 1 3 1
Intra-ASEAN 10 8 8 6 5 5
Table 2. Steel Product Imports of Six Southeast Asian
Countries
Source: SEAISI Steel Statistical Yearbook
Featured Articles Increased Trade Barriers in Southeast Asia Following a Rapid Rise in Steel Imports
Reporting Country Indonesia Malaysia Philippines Singapore Thailand Vietnam Total
1995-2012 21 0 3 2 26 0 52
2013-2014 11 7 0 0 11 4 33
Exporting Country Indonesia Malaysia Philippines Singapore Thailand Vietnam Total
1995-2012 12 18 1 0 21 2 54
2013-2014 4 2 0 1 3 6 16
Source: WTO Website
Table 3. Anti-dumping Measures in Base Metal Sector by Six Southeast Asia Countries
Strategic approach
to investment
and export

5. Vol.01 January 2016 8382 Asian Steel Watch
Asian version of the European Union,
is a single economic block having 620
million people with a combined GDP
of USD 2.5 trillion.4 The AEC has set
four mid-to-long term goals for the ASEAN: (1)
to build a single market and production base, (2)
to become a highly competitive economic region,
(3) to achieve equitable economic development,
and (4) to fully integrate the region with the
global economy. Under these goals, the AEC aims
to transform the ASEAN into a region with free
movement of goods, services, investment, labor,
and capital. With the establishment of the AEC,
ASEAN countries seek to expand infrastructure
and production bases to increase production
within the region. Following the establishment
of the AEC, ASEAN member countries, under
the goal of building a single production base and
market, will further strengthen protectionist
measures to protect their own manufacturing.
Considering the economic and political
changes in Southeast Asia and global steel mar-
ket conditions, trade protectionism in Southeast
Asian steel markets is here to stay. In Indonesia,
the largest Southeast Asian economy, the Jokowi
administration has followed in the footsteps of
the former administration, expanding protec-
tionist and import control measures to protect
its own industry. Therefore, investors need a cau-
tious approach. When considering investment in
Southeast Asia, Korean, Chinese, and Japanese
steelmakers should keep in mind that it is both a
major export destination and a production base
for them. When making new investments, it is
Featured Articles
The Asian steel industry is heavily affected by growing
steel exports by China, which is caused by the stagnation
of China's steel-consuming industries.
In India, imports from China increased 49% year on
year in 2014. Since the launch of the Modi administration,
reform policies have led the recovery of the automotive,
construction, and other major steel-consuming industries,
but Chinese imports are clouding the revitalized market.
Thailand is in the same boat. In Thailand, the recovery
of government investment in infrastructure and private
investment in construction turned on the green light for
steel-consuming industries. However, imports from China
have increased sharply, and China is expanding its market
share in Thailand. As a result, the market shares of Japan,
Korea, and other steel exporters are shrinking. Indonesia
is in a similar situation.
However, a different story is unfolding in the Korean
and Japanese markets. The stagnation of the automotive,
shipbuilding, and other key steel-consuming industries
is causing a fall in domestic demand. In 2015, domestic
demand dropped 0.1% in Korea, and around 7% in Japan,
compared to the same period of the previous year. Import
amount is decreasing as a result. Notwithstanding, Korea
is maintaining a growth rate of over 10% in imports of cer-
tain products, including rebar.
In response to the increase in Chinese exports, In-
donesia increased import tariff by 10-20%p, depending
on the product, in May 2015. Malaysia launched an anti-
dumping probe on cold-rolled sheet steel in April 2015 and
imposed three-year safeguard duties on thick plates in July
2015. Thailand imposed safeguard duties of 21% on thick
plates in December of 2014. Even South Korea, a major
steel exporter, ruled in June 2015 to levy antidumping cus-
advisable for steelmakers to seek joint ventures
with local steelmakers, rather than entering
the market independently. Those already in the
market should strengthen cooperation with local
steel companies and suppliers. Those who have
production bases in the region might utilize ex-
isting networks with local partners, and propose
strengthened government restrictions on rival
steel importers. However, companies that pro-
cure materials outside the region, or export steel
products to Southeast Asia as well as produce
them locally, should carefully examine the advan-
tages and disadvantages of strengthened import
controls.
Recently, upstream investment through al-
liances between foreign and local steelmakers
is especially active in Indonesia and Vietnam. If
steel production in the region takes off and intra-
regional trade increases following the launch of
the AEC, steel products made in Southeast Asia
will most likely replace imports.
Some people are concerned that the ASEAN
steel market might become a so-called red ocean
due to reckless investment and surging imports.
However, considering the growth potential of
the end market, Southeast Asia is still an at-
tractive market compared to other already-
saturated markets. In order to reduce risk and
maximize opportunity in Southeast Asia, steel
companies should take a careful and strategic
approach, considering the impact of strong
trade protectionism, fierce competition in the
steel industry, and economic integration on the
heels of the AEC.
toms duties of around 28% on Chinese H-beams.
Most of these trade remedial measures seek to mini-
mize damage to domestic industries from steel imports
in 2015 or earlier. Will trade remedial measures continue
to increase from now onward? To answer this question,
three key factors must be examined. The first key factor is,
obviously, the amount of China’s exports. In 2014, China
exported 94 million tonnes of steel, 50% more than in the
previous year. China's steel exports in 2015 recorded 112
million tonnes. With the construction, automotive, and oth-
er major steel-consuming industries slowing down, pres-
sure to increase exports is still mounting. This pressure will
continue to build even after 2016 with the completion of
seaside steel mills in Zhanjiang and Fangchenggang.
The second factor to consider is the continued growth
of capacity within Asia. In the first half of 2016, Vietnam
will add capacity of 7 million tonnes per annum with the
completion of the Formosa integrated steel mill. Part of the
hot-rolled steel mass-produced here will cover domestic
demand, and another part will likely be exported. Vietnam
imported 6.4 million tonnes of hot-rolled steel in 2014.
When the Vietnamese import market shrinks, import pres-
sure on nearby countries will increase.
Finally, due to cost variation by steel manufacturing
process, exports of long products made in China will con-
tinue to rise. About 90% of China’s crude steel is produced
in blast furnaces, as are most of its long products. Most
other Asian countries produce long products in electric arc
furnaces. Prices of raw materials used in blast furnances,
iron ore and coking coal, dropped continuously from early
2014, while prices of scrap used in electric arc furnances
dropped relatively less in the first nine months of 2015.This
resulted in a significant increase in long product exports
from 2014. If the raw materials prices continue to be low
enough, pressure to import Chinese long products will con-
tinue to increase.
In summary, considering China’s export amount, in-
creasing production capacity in Asia, and downslide in raw
materials prices, Chinese products will continue to flood
Asian markets. For countries across Asia, the changing
market dynamic is leaving them with no choice but to take
trade remedial measures to protect and nurture their do-
mestic steel industries. The trade remedial measures imple-
mented so far seem to be only the tip of the iceberg.
Steel Trade Tensions Are
Escalating Everywhere in Asia
Dr. Busik Choi
Senior Principal Researcher, POSCO Research Institute
busikc@posri.re.kr
Increased Trade Barriers in Southeast Asia Following a Rapid Rise in Steel Imports
4
Data for year 2014. See
International Monetary Fund,
World Economic Outlook
Database, April 2015

6. Vol.01 January 2016 8382 Asian Steel Watch
Asian version of the European Union,
is a single economic block having 620
million people with a combined GDP
of USD 2.5 trillion.4 The AEC has set
four mid-to-long term goals for the ASEAN: (1)
to build a single market and production base, (2)
to become a highly competitive economic region,
(3) to achieve equitable economic development,
and (4) to fully integrate the region with the
global economy. Under these goals, the AEC aims
to transform the ASEAN into a region with free
movement of goods, services, investment, labor,
and capital. With the establishment of the AEC,
ASEAN countries seek to expand infrastructure
and production bases to increase production
within the region. Following the establishment
of the AEC, ASEAN member countries, under
the goal of building a single production base and
market, will further strengthen protectionist
measures to protect their own manufacturing.
Considering the economic and political
changes in Southeast Asia and global steel mar-
ket conditions, trade protectionism in Southeast
Asian steel markets is here to stay. In Indonesia,
the largest Southeast Asian economy, the Jokowi
administration has followed in the footsteps of
the former administration, expanding protec-
tionist and import control measures to protect
its own industry. Therefore, investors need a cau-
tious approach. When considering investment in
Southeast Asia, Korean, Chinese, and Japanese
steelmakers should keep in mind that it is both a
major export destination and a production base
for them. When making new investments, it is
Featured Articles
The Asian steel industry is heavily affected by growing
steel exports by China, which is caused by the stagnation
of China's steel-consuming industries.
In India, imports from China increased 49% year on
year in 2014. Since the launch of the Modi administration,
reform policies have led the recovery of the automotive,
construction, and other major steel-consuming industries,
but Chinese imports are clouding the revitalized market.
Thailand is in the same boat. In Thailand, the recovery
of government investment in infrastructure and private
investment in construction turned on the green light for
steel-consuming industries. However, imports from China
have increased sharply, and China is expanding its market
share in Thailand. As a result, the market shares of Japan,
Korea, and other steel exporters are shrinking. Indonesia
is in a similar situation.
However, a different story is unfolding in the Korean
and Japanese markets. The stagnation of the automotive,
shipbuilding, and other key steel-consuming industries
is causing a fall in domestic demand. In 2015, domestic
demand dropped 0.1% in Korea, and around 7% in Japan,
compared to the same period of the previous year. Import
amount is decreasing as a result. Notwithstanding, Korea
is maintaining a growth rate of over 10% in imports of cer-
tain products, including rebar.
In response to the increase in Chinese exports, In-
donesia increased import tariff by 10-20%p, depending
on the product, in May 2015. Malaysia launched an anti-
dumping probe on cold-rolled sheet steel in April 2015 and
imposed three-year safeguard duties on thick plates in July
2015. Thailand imposed safeguard duties of 21% on thick
plates in December of 2014. Even South Korea, a major
steel exporter, ruled in June 2015 to levy antidumping cus-
advisable for steelmakers to seek joint ventures
with local steelmakers, rather than entering
the market independently. Those already in the
market should strengthen cooperation with local
steel companies and suppliers. Those who have
production bases in the region might utilize ex-
isting networks with local partners, and propose
strengthened government restrictions on rival
steel importers. However, companies that pro-
cure materials outside the region, or export steel
products to Southeast Asia as well as produce
them locally, should carefully examine the advan-
tages and disadvantages of strengthened import
controls.
Recently, upstream investment through al-
liances between foreign and local steelmakers
is especially active in Indonesia and Vietnam. If
steel production in the region takes off and intra-
regional trade increases following the launch of
the AEC, steel products made in Southeast Asia
will most likely replace imports.
Some people are concerned that the ASEAN
steel market might become a so-called red ocean
due to reckless investment and surging imports.
However, considering the growth potential of
the end market, Southeast Asia is still an at-
tractive market compared to other already-
saturated markets. In order to reduce risk and
maximize opportunity in Southeast Asia, steel
companies should take a careful and strategic
approach, considering the impact of strong
trade protectionism, fierce competition in the
steel industry, and economic integration on the
heels of the AEC.
toms duties of around 28% on Chinese H-beams.
Most of these trade remedial measures seek to mini-
mize damage to domestic industries from steel imports
in 2015 or earlier. Will trade remedial measures continue
to increase from now onward? To answer this question,
three key factors must be examined. The first key factor is,
obviously, the amount of China’s exports. In 2014, China
exported 94 million tonnes of steel, 50% more than in the
previous year. China's steel exports in 2015 recorded 112
million tonnes. With the construction, automotive, and oth-
er major steel-consuming industries slowing down, pres-
sure to increase exports is still mounting. This pressure will
continue to build even after 2016 with the completion of
seaside steel mills in Zhanjiang and Fangchenggang.
The second factor to consider is the continued growth
of capacity within Asia. In the first half of 2016, Vietnam
will add capacity of 7 million tonnes per annum with the
completion of the Formosa integrated steel mill. Part of the
hot-rolled steel mass-produced here will cover domestic
demand, and another part will likely be exported. Vietnam
imported 6.4 million tonnes of hot-rolled steel in 2014.
When the Vietnamese import market shrinks, import pres-
sure on nearby countries will increase.
Finally, due to cost variation by steel manufacturing
process, exports of long products made in China will con-
tinue to rise. About 90% of China’s crude steel is produced
in blast furnaces, as are most of its long products. Most
other Asian countries produce long products in electric arc
furnaces. Prices of raw materials used in blast furnances,
iron ore and coking coal, dropped continuously from early
2014, while prices of scrap used in electric arc furnances
dropped relatively less in the first nine months of 2015.This
resulted in a significant increase in long product exports
from 2014. If the raw materials prices continue to be low
enough, pressure to import Chinese long products will con-
tinue to increase.
In summary, considering China’s export amount, in-
creasing production capacity in Asia, and downslide in raw
materials prices, Chinese products will continue to flood
Asian markets. For countries across Asia, the changing
market dynamic is leaving them with no choice but to take
trade remedial measures to protect and nurture their do-
mestic steel industries. The trade remedial measures imple-
mented so far seem to be only the tip of the iceberg.
Steel Trade Tensions Are
Escalating Everywhere in Asia
Dr. Busik Choi
Senior Principal Researcher, POSCO Research Institute
busikc@posri.re.kr
Increased Trade Barriers in Southeast Asia Following a Rapid Rise in Steel Imports
4
Data for year 2014. See
International Monetary Fund,
World Economic Outlook
Database, April 2015