Philippine steel industry keeps on growing

According the Business Inquirer Philippine iron and steel industry is poised to continue its growth. In a presentation before the Organization for Economic Cooperation and Development in France earlier this month, the Philippines Board of Investments said that the demand for steel products would be driven largely by the implementation of big ticket government infrastructure projects, reconstruction efforts for the typhoon and earthquake affected areas and the housing backlog and redevelopment of urban centers across the country.

According to the BOI, the projects are expected to translate into increased local production of rebars, shapes and sections as well as increased importation of billets and coated steel products. Data provided by the bureau showed that apparent steel consumption grew by 9.2% to 6.58 million tonnes in 2013 from the 6.03 million tonnes recorded the previous year. The increase was attributed to the continuing growth in real estate developments and higher infrastructure spending by the government.

Of the total demand for steel, 81% went to the construction industry; 9% were used for light and heavy fabrication; 5% for shipbuilding;4 % for packaging; and the rest went to cover other requirements. The BOI said last year, crude steel production grew by 3.8% to 1.31 million tonnes while finished steel production rose 30% to 4.17 million tonnes. Finished steel imports and exports stood at 3.67 million tonnes and 100,000 MT, respectively. At present, the growth of the steel and iron industry is hampered largely by the high cost of power, technical smuggling, outdated facilities and tariff distortions concerning imported steel products.

The BOI is now looking at providing specific incentives to encourage more investors to set up ironmaking facilities and go into flat products manufacturing. The BOI also noted that the need for strict enforcement of the Customs laws and technical regulations; increased support for research and development; and for the review of tariffs to remove the so called distortions.