The Grey Chronicles

2008.August.5

ASEAN Steel Supply (Production)


IISI, SEAISI)

Figure 10: ASEAN Hot Rolled Flats Production, 1991-2004 (Data: IISI, SEAISI)

Hot-rolled flat steel production determines the total domestic finished flats production, i.e., cold-rolled flat steel and tinplates. It is economically viable for a steel company with hot-rolled capacity to use domestically produced HRC for its downstream finishing lines (Koda, et. al., 1995).

There are four hot-rolled steel-producing member-countries of ASEAN, namely: Thailand, Indonesia, Malaysia and the Philippines. Figure 10, a more detailed version of Figure 9 above, illustrates that among the four flat-steel-producing member-countries of ASEAN, only the Philippines and Thailand decreased its hot-rolled steel production after 1996, while the two others have continuously increased its respective production for the ten-year period: 1993-2003, but all decelerated during the Asian Financial Crises, respectively.

Lamberte, et. al. (1999) found that capacity utilization of firms decreased from July 1997, on the onset of the Asian Financial Crises.

Table 7: World / ASEAN Total Production of Crude Steel, 1994 – 2000

World / ASEAN Total Production of Crude Steel, 1994 - 2000

Table 7: World / ASEAN Total Production of Crude Steel, 1994 - 2000

Shown above is a tabulation of world and ASEAN total crude steel production for the period 1994-2000. Appendix G, Table 7 shows the raw data for the world and ASEAN total crude steel production used to create Figure 11.


IISI)

Figure 11: World, ASEAN vs. NSC Crude Production, 1991-2004 (Data: IISI)

Comparing the per cent year-on-year (%y-o-y) change in NSC production, Figure 11 shows that while the World crude production oscillated in the ±10% y-o-y band, and the ASEAN crude production moved between –20% and +40% year-on-year, NSC spiraled down to its lowest point of –72.78 % year-on-on-year by 1999 from a peak of 56.25% year-on-year six year earlier.

Eerily, the downhill trend for NSC began well before the Asian Financial Crises in 1997-98, but rather in 1994, the banner year when it was privatized during the Ramos administration!

Data shows that there is a strong positive correlation between NSC crude production to the Philippine crude production (refer to Appendix G, Table 13). This acknowledges the fact that NSC is the only hot-rolled manufacturer in the Philippines. Furthermore, NSC production data exhibited a negative weak correction versus both the World and ASEAN crude production. Compared to both world and ASEAN, NSC crude production is very small in tonnages.


Notes:

Koda, S., Kaihara, T. and Dobashi M. (1995), “Steel Demand Projection in Asia,” Tokyo: Kawasaki Steel, 03 August 1995. pp. 1-5. back to text

Lamberte, Mario B., et. al. (1999), “Impacts of the Southeast Asian Financial Crisis on the Philippine Manufacturing Sector.” Discussion Paper No. 99-09 (Revised), Manila: Philippine Institute for Development Studies, 11 May 1999. pp. 1-55. back to text

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