Tel :
Faced with increasingly severe overcapacity and oversupply in the maritime shipping market, emerging steelmakers in Southeast Asia are attempting to differentiate themselves through green transformation. Among the steel projects planned in Southeast Asia, several have explicitly positioned themselves as green steel, reflecting the accelerated decarbonization of the global steel industry.
In the Thai market, for example, Meranti Green Steel, a company aspiring to become Southeast Asia's first green steel company, plans to build a production line in Thailand using direct reduced iron (DRI) technology and gradually increasing the proportion of hydrogen. RINA RI/A500 steel This production line will be equipped with an electric arc furnace (EAF) powered by renewable energy. The company expects to initially reduce CO2 emissions by 70% compared to traditional blast furnaces, ultimately aiming to operate entirely on green hydrogen. As of now, the company has signed an offtake agreement with Anglo American for iron ore pellets and lumps to produce green hot-rolled coil (HRC).
In the Malaysian market, Green Esteel has completed a 2.5 million ton annual hot briquetted iron (HBI) plant in Sibu, Malaysia. Japanese trading company Hanwa previously announced its investment in the plant, acquiring HBI sales rights, including export rights to Japan. The HBI plant currently uses natural gas reduction, with plans to add additional DRI and steel production facilities in the future.
However, Malaysia's HBI projects do not stop there. On June 10 this year, Maegma Minerals, a subsidiary of the Kuala Lumpur-based Melewar Group, signed a memorandum of understanding with Primetals Technologies to build a 2 million ton per year HBI plant in Lumut, Perak.
Differentiated competition is a response to the expansion of blast furnace capacity in the region
Market participants continue to warn of the risk of steel overcapacity in Southeast Asia. The Southeast Asia Iron and Steel Institute (SEAISI) predicts that crude steel production capacity in the six ASEAN countries will surge from 78 million tons in 2022 to 94 million tons in 2024, and will reach a staggering 182.5 million tons by 2030. RINA RI/A500 steel Market analysts believe that this rapid expansion may outstrip regional demand growth, depressing steel prices and potentially triggering trade protectionism.
Despite concerns about overcapacity, Southeast Asian countries continue to expand capacity. For example, on August 7, Hoa Phat completed the overhaul and resumption of production at the No. 1 blast furnace at its Dung Juk 1 project in Vietnam. The resumption of production at this 1,080-cubic-meter blast furnace (one of four similar-sized blast furnaces at the site, each with an annual capacity of 1-1.2 million tons) is expected to boost sales in the second half of the year and stabilize domestic steel supply. Separately, the Dung Juk 2 project, with an investment of 85 trillion Vietnamese dong (US$3.4 billion), is under construction in Quang Ngai Province and is expected to begin operations in September 2025. This project will add two 2,500-cubic-meter blast furnaces (each with an annual capacity of 2.5-2.8 million tons), bringing Hoa Phat's total production capacity to 16 million tons (including 9 million tons of hot-rolled coil), with a long-term target of 21 million tons by 2029.
In addition to Vietnam, other projects planned for construction and production include: Alliance Steel (increased to 10 million tons), Krakatau Steel/Krakatau Posco (additional 3 million tons), Wen'an Steel (target 10 million tons) and Hebei Bishi (target 3 million tons).
New development directions and opportunities emerge in the demand pattern of steel raw materials
Blast furnace capacity expansion is changing the structure of raw material demand. The resumption of Hoa Phat's blast furnaces has sparked new demand in the scrap steel market (blast furnace feedstock typically contains 10-15% scrap steel). RINA RI/A500 steel It is understood that with the resumption of existing blast furnaces and the commissioning of new projects, Vietnam's demand for high-quality scrap steel will increase. Furthermore, HBI, as a raw material, not only supplements scrap steel supply but also plays a key role in the low-carbon transition, is becoming an emerging HBI consumer market alongside the construction of HBI projects. Against this backdrop, HBI, with its environmentally friendly and process-compatible properties, is expected to become a key pillar in the Southeast Asian steel industry's efforts to balance capacity expansion with carbon neutrality goals.